Historically, many Americans could confidentially look towards retirement — knowing that their pensions, retirement accounts, and social security income could support them. While this is still true for some, there is growing insecurity about retirement and having enough money to maintain their lifestyle. In fact, according to a survey from Sagewell Financial, around 30% of Americans between the ages of 55 and 67 have less than $10,000 saved for retirement. This is not very much money to begin with, but with mounting inflation, this sum could take retirees less far away than they initially expected.
Moreover, the same survey points out that over 70% of people of this same age group are planning or are willing to work during retirement. For those looking forward to retiring, this is a significant blow. While this does seem like a dire situation, there are ways for seniors to free up more money; an increasing number of retirees are turning to reverse mortgages, so they can enjoy their retirement to its fullest. In today’s blog, Family Home Loan Texas explores the ways that you can use your home to provide additional income.
Why You Should Consider A Reverse Mortgage
A reverse mortgage, also known as a HECM, is a loan that allows you to turn your home equity into liquid funds. It is available to people who are at least 62 years old and have at least 50% equity in their primary residence. You must take out the loan on this residence — the one you spend at least half the year in. When you receive a reverse mortgage, you retain full ownership of your home while also receiving money from a lender. While interest on the payments does accrue, you will not have to pay anything back until you move out of the house. If you pass away while you have a reverse mortgage, your heirs can either sell the house to pay back the loan, or they can pay it back and retain ownership.
A reverse mortgage is so helpful because it turns your home equity, which sits stagnating, into money you can actually spend. Moreover, you can continue living in the home you have created decades of memories in, allowing you to live more comfortably and on your own terms. Receiving this money allows you to supplement your fixed income and minimize the need of going back to work. After all, you’ve spent years waiting to retire, and it is quite a blow to have to continue working during the time you expected to finally relax and not worry about work.
Have Enough Money For Suprise Expenses
As we grow older, we face more unexpected surprises. If you have a carefully constructed budget, these financial surprises can throw a wrench into your well-laid plans. If you only have $10,000 saved up for retirement, a single medical bill can completely wipe this out. With a reverse mortgage, you have the peace of mind knowing that you can cover medical expenses, and emergency home repairs, and can even help a relative out with tuition or a downpayment. Reverse mortgages are all about flexibility, so you can spend the money you receive however you please. Additionally, it is considered a non-taxable income, so you are able to keep the full amount that you get. You can receive your funds as a lump sum, regular payments, or a line of credit. Each of these options has its own benefits, so you should consider your own unique needs and pick the one that is right for you.
Ultimately, a reverse mortgage can give you peace of mind as you enter retirement, as it will effectively help you supplement the money you have saved up for this time in your life. As inflation grows and your dollar doesn’t go as far, having extra money that you do not have to pay back for as long as you want helps immensely.
Contact Us To Learn More About A Reverse Mortgage
We are here to help you live your retirement to its fullest. Family Home Loan Texas was founded by loan originator and long-time mortgage professional Rob Bramer. Rob has helped clients secure the loans they need both locally and nationally and can help you get the loan you need to live life on your terms. Call 1-800-990-LEND (5363) to speak with Rob about a reverse mortgage loan and to receive a free, no-commitment consultation.