Many Americans spend their entire working lives saving for retirement. Everyone knows the significance of funding their 401k, stashing some money away in securities, and investing in real estate. The question is: how do you use those investments once you retire in order to supplement your income?
There are many ways to tap into your assets, but you need to be careful how you go about it. For example, cashing out your 401k too quickly may trigger a large tax burden and accessing your home equity can lead to high interest expenses and could turn out to be costly. Obviously, selling your home is the quickest way to access your investment, but again, you may incur large expenses. Additionally, you could also take out a line of credit, but this requires you to make monthly payments on to the debt and decreases your retirement income. So, neither of those options really serves as a solution to increasing your retirement cash flow.
An alternative to those options, and maybe the best way for seniors 62 and above to access their home equity after retirement, is through a reverse mortgage. This type of financing lets you eliminate your monthly mortgage payments1 and in some cases you may be able to receive monthly payments that come from your home equity and/or a line of credit that grows over time. These funds can be set aside and used as needed. Most importantly, a reverse mortgage allows you to maintain ownership and title to your home. There are interest and fees associated with this type of financing, but generally, the interest is lower or comparable to other products in the industry.
You’ve already been paying for your home your entire life, and for once you can finally have your home pay you. If this sounds like an option you would like to consider, call us for more information at 800.218.1415, and to receive a free, no-obligation quote from a licensed loan officer. It’s important to know the facts about how a reverse mortgage can help you before you make a decision on your own.
1You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance and maintain the home according to Federal Housing Administration requirements.
How to structure your assets for retirement? – Cleverduded.com, 9/28/2016. http://www.cleverdude.com/content/how-to-structure-your-assets-for-retirement/?tc=eml