During your pre-retirement years, it’s important to keep your spending and savings habits in check. When this isn’t enough, a Reverse Mortgage might be right for you. One large problem facing retirees is the realization that the budget that was working for their first 10 years of retirement may not cover costs going into their next 10 years. This is largely due to people living longer. Therefore it is all the more important to identify future deficiencies in saving and spending habits early in order to correct financial course and have savings that will enable the homeowner to live comfortably late into the retirement years.
There are a number of web site tools, like AnalyzeNow.com, that are devoted to retirement planning or life-expectancy calculators, like the one at Livingto100.com, which allow the user to enter personal variables. If after reviewing these sites you’ve come to find that you may encounter future money deficiencies there are options you can employ now to evade future financial woe. Some homeowners consider the option of downsizing into a smaller home and converting the equity from the sale of the larger home into cash. However, many homeowners find the prospect of selling and moving into a new home a bit daunting, in which case, a reverse mortgage may be the solution. A reverse mortgage can be utilized to stave off financial problems in the future but the consumer should first arm themselves with the facts before delving headlong into restructuring their mortgage.
Be sure to review your savings, spending habits and investment returns, loop your children into the discussion, and educate yourself on the pros and cons of a reverse mortgage so that you can proceed confidently into considering this option.
The response above is not intended to be anything other than the educated opinion of the author. It should not be relied upon as financial advice.