Reverse Mortgage Guide

The Wall Street Journal reports that “as consumers max out their credit lines and banks clamp down on lending, many older and middle-class Americans are resorting to pricey, often-risky alternatives to stay afloat. Some are depleting their retirement accounts, tapping 401(k)s for both loans and hardship withdrawals. Some new fast-cash options allow homeowners to squeeze equity from their houses — without the burden of monthly payments.”

The Journal story mentions trading an insurance policy for cash today, something called a “life-settlement” agreement. The idea is that you get a lump sum now while someone else pays the premium and collects the proceeds for what might be called the ultimate “maturity event.”

More significantly, the story notes that a growing number of savers are cashing in retirement assets early.

The real issue described by the Journal story really doesn’t have much to do with seniors, reverse mortgages, insurance or annuities. Instead, the core concern is the reality that our economy is changing and a lot of people — including a lot of people who thought they were financially well-situated — are being left behind if not left out.

For the full story, see Pinched Consumers Scramble for Cash

This entry was posted on Tuesday, June 3rd, 2008 at 12:38 am and is filed under Reverse Mortgage . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.