Living Expenses Should Be Lower In Retirement - But Is This Really The Case?

1/05/2008

posted by N. Sioris

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Conventional wisdom says that during retirement your expenses will be lower than they were while you were raising a family and working. Many financial planners contend that you will only need about 75 to 85% of your pre-retirement income to live comfortably in retirement. The expenses that will no longer be a factor are taxes, commuting, savings and other bills that will disappear after you leave work.

However, a recent survey conducted by the Wall Street Journal says that for many retirees their financial needs equal or exceed their spending during their working years. Some of the factors contributing to this phenomenon are that retirees, especially during the early years, wish to travel, make home improvements, help family members and contribute to their communities. Discretionary spending actually increases for many retirees. In addition, retirees are encountering higher than expected costs for such things as home owner's insurance, property taxes, health care and long term care insurance.

One way that many senior homeowners are covering some of these expenses is by tapping into their accumulated home equity, by using a reverse mortgage. By taking equity from your home with a reverse mortgage you are not obligating yourself to any additional monthly mortgage payments. A Reverse Mortgage is the reverse of a regular conventional mortgage, in that, the lender now makes payments to you instead of the other way around. The money you receive from a reverse mortgage is tax-free and will not negatively impact your Social Security or Medicare benefits.

A free reverse mortgage benefit summary can be obtained without obligation, just click here for your Free Evaluation, and see if you qualify for this unique financial planning tool.