Ways to Receive a “Paycheck” Throughout Retirement
Information
accurate as of
January 8, 2020
in Blog

Ways to Receive a “Paycheck” Throughout Retirement

Ways to Receive a “Paycheck” Throughout Retirement

When you retire, your paychecks stop, but your expenses will continue. The need to create a reliable source of income during your retirement may take some planning and strategic choices.  Here are some ways you could still receive money in your golden years:

Social Security

The earliest an individual can start receiving social security benefits is 62; however, benefits will be reduced a fraction of a percent for each month before your full retirement age of 70.1 Social security benefits are modest and are not meant to be the sole means for retired seniors to live on.  If someone who worked all of their adult life (with “average earnings”) chooses to retire at age 65, Social Security benefits replace just 38% percent of past earnings.2   A retiree will need to adjust their standard of living to live off of these benefits alone.

Personal Savings

Even if you have a million dollars sitting in your bank account, you should have a strategic method of making the most of or preserving your income stream. No matter the size of your nest egg, taking out only the amount of money you need and letting the rest continue to work for you is a wise strategy. Figuring out your cash-flow needs and only taking out that amount of money on a regular basis can be an integral part of continuing your income stream in retirement.

Reverse Mortgage

Senior homeowners can access a portion of their home equity as usable funds with a reverse mortgage loan. Borrowers can customize the amount of money they receive to fit their needs.  Proceeds can be received via a lump sum,3 monthly payments, a line of credit that grows over time,4 or any combination of the three. With a reverse mortgage, you can eliminate your monthly mortgage payments5 which can increase your cash flow.

If you would like to learn more about receiving monthly payments with a reverse mortgage, call 1.800.976.6211 to speak to one of our licensed loan advisors.

1https://www.ssa.gov/planners/retire/agereduction.html

2https://www.ssa.gov/OACT/NOTES/ran9/an2018-9.pdf

3 The funds available to the borrower may be restricted for the first 12 months after loan closing, due to HECM reverse mortgage requirements. In addition, the borrower may need to set aside additional funds from the loan proceeds to pay for taxes and insurance.

4 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.

5 You must live in the home as your primary residence, continue to pay required property taxes, homeowners insurance, and maintain the home according to FHA requirements. Failure to meet these requirements can trigger a loan default that may result in foreclosure.