Reverse Mortgage: Part of Your Retirement Arsenal

2/18/2008

posted by N. Sioris

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As the retirement population continues to live longer healthier lives, more financial responsibility must be assumed by individuals. This reality may be a rude awakening for many retirees, who let themselves believe that they could live comfortably in retirement solely on Social Security. According to an AARP survey, the majority of Americans are counting on Social Security for most of their retirement income.

The problem with this theory is that by some government estimates, Social Security contributions will be less than the amount to be paid out to retirees by the year 2017. It is inevitable that adjustments will have to be made. Those adjustments may take the form of lower benefit amounts to be paid as well as higher minimum age requirements to receive benefits.

If you have been prudent enough to save for your own retirement through various other vehicles, you may not be as hard hit as those who have not saved. Some of you may have retired from a company that offered a defined benefit plan. If you are one of those, consider yourself to be among the fortunate. Most companies have phased the pension or defined benefit plans out in favor of 401K plans. The difference of course, is that 401K plans put most of the burden of saving and managing the account on the employee. The employers saved a boat-load of money by eliminating the defined benefit plans. The trouble with the 401K concept though, is that they are completely voluntary. Many employees do not participate in them and therefore, are not saving for their own retirement.

With costs of insurance, health care, medicine, gas, heating oil, food, and just about every other thing we need on a daily basis going up in price (despite what the government says about inflation) we could be facing the perfect storm: Decreased income from Social Security and increases in everyday costs of living.

If you have equity in your home, you may want to consider this asset as part of your overall plan for retirement income. By using a reverse mortgage, you can receive money from your home without assuming personal liability and without making any mortgage payments.

If you are fortunate to have additional assets in retirement accounts, annuities, pension funds, etc. you may still wish to consider a reverse mortgage as part of your overall arsenal of assets for retirement. If you are interested in finding out how much money you may be eligible for from a reverse mortgage, please click here for your personal benefit summary.