Can a Reverse Mortgage Extend Retirement Savings?

make-retirement-funds-last-longerWe all know we need to save for retirement. But what if you’re already retired, or retirement is just around the corner, and you don’t have the savings you had expected at this point?

In a 2010 poll by Allianz Life Insurance Company of 3,257 people ages 44 to 75, 61 percent said they fear running out of money more than they fear death1.

Thankfully, there are still options to stretch your retirement savings, even while in retirement. We’ve compiled some tips to maximize that nest egg.

  1. Downsize. If you’ve been living in a large home, consider moving to a smaller location to save on utilities, property taxes and even insurance costs. Have multiple vehicles? Perhaps you only need one or can take public transportation to save on gas, insurance and registration costs. A substantial cost for many seniors is healthcare and medications. Check out needymeds.com to see if you qualify for medication cost assistance.1
  2. Take advantage of Social Security. According to Kenn Tacchino, a financial planning professor at Widener University in Chester, PA, if you are under 70 and started collecting Social Security in the last 12 months, you can repay everything back and it will be like you never collected. The longer you wait to claim Social Security the more you’ll receive. If you claim Social Security at age 62, you’ll receive 75% of your benefits. If you wait until you’re 66, you’ll receive 100% of your benefits. If you wait until you’re 70, you will receive 132% of your benefits!
  3. Consider a reverse mortgage loan. You have probably seen the commercials on TV advertising how a reverse mortgage can help supplement your retirement income. A reverse mortgage allows senior homeowners 62 and older to tap into a portion of the equity in their home to pay off their existing mortgage, pay for medical expenses or save for unplanned expenses. With an adjustable rate reverse mortgage, you can choose to receive your loan proceeds as a lump sum, monthly payments or as a line of credit.
  4. Meet with a financial planner. If you have a number of assets, a financial planner can help you manage your money so that it lasts longer.
  5. Consult professionals. If you are truly out of savings, there are community programs that may be able to help. Veterans especially have many services available to them including medical, home care, pensions and nursing homes.

When it comes to retirement, it’s always a good idea to ask a lot of questions. The more you know about your situation, the better.

For more information about reverse mortgage loans, call a reverse mortgage loan advisor at 800.976.6211.