Many seniors are worried they will not be able to save enough for retirement. Starting to save later in life can be overwhelming and often feel like an uphill battle. The five strategies below can help you make a plan to maximize your money in retirement.
1. Understand your Social Security Benefits
Don’t expect social security to cover all of your expenses. Plan out when you will apply for social security and calculate how much you will be eligible to receive at that time. Add your social security payment to your budget to understand exactly what expenses it will cover.
2. Don’t Underestimate Your Needs
When planning for retirement, people often underestimate the costs of aging. No one wants to think about their health declining, but it’s important to consider this possibility from a cost perspective. This way, if the unthinkable does happen you can minimize financial stress.
3. Realize Your Earning Power
Calculate your lifetime earning potential and make sure you are saving enough of your earnings now to prevent outliving your retirement savings later on.
4. Work With a Professional
Consult with a professional financial planner to make sure your retirement plan is on track to help you reach your goals.
5. Leverage Your Home Equity
Set up a line of credit using a reverse mortgage. The line of credit will grow over time1 and be available as an emergency fund any time you may need it. The loan is insured by the Federal Housing Administration2 and allows the borrower to stay in the home and maintain the title.3 No payments on the loan are due until the last borrower no longer occupies the home as their primary residence.
If you are a homeowner 62 or older and looking for ways to save enough for retirement, a reverse mortgage may be right for you. To learn how much you may qualify for and get answers to your questions fill out the calculator above or call 1.800.976.6211.
1 The reverse mortgage loan balance grows at the same rate as the available line of credit. Line of credit growth occurs and is only a benefit when a portion of the line of credit is not used. The unused line of credit grows over time and more funds become available during the life of the loan.
2 Federal Housing Administration (FHA) mortgage insurance premiums (MIP) will accrue on your loan balance. You will be charged an initial MIP at closing. The initial MIP will be 2% of the home value not to exceed $13,593. Over the life of the loan, you will be charged an annual MIP that equals .5% of the outstanding mortgage balance.
3 You will retain the title and ownership during the life of the loan, and you can sell your home at any time (at which time the loan becomes due). The loan will not become due and subject to repayment as long as you continue to meet loan obligations such as living in the home as your primary residence, maintaining the home according to the Federal Housing Administration (FHA) requirements, and paying property taxes and homeowners insurance. Failing to meet these requirements can trigger a loan default that may result in foreclosure.