2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

After retiring from long professional careers, the two of you have been able to maintain a relatively high standard of living based on retirement income supplemented with earnings from employment data security consulting gigs. In fact, 2019 began a string of unusually high income years for you, and you have been able to add a very tidy sum to your jointly held investment accounts, along with updating the kitchen and baths in your home.

All good news, until a recent notice from the Social Security Administration informed you that, beginning in 2022, your monthly premiums for Medicare will be close to triple what you are now paying. Your tax advisor explained that the increase is related to IRMAA (Medicare Income-Related Monthly Adjustment Amount). This, you’ve now learned, is an amount you will pay in addition to your Part B and Part D (prescription coverage) Medicare premiums. Since you anticipate even greater earnings the last quarter of this year and even more next year due to the consulting opportunities arising from pandemic-related staffing issues, this annoying new insurance cost may increase even further, you fear. While your tax advisor had suggested contributing to SEP accounts in order to reduce your taxable income, you are reluctant to reduce your current lifestyle spending to any significant degree.

Tapping housing wealth in the form of a reverse mortgage might help solve some of the “too high an income” issues you describe. Tax-free, lump sum withdrawals from the reverse credit line can provide funding for significant charitable gifts in this and coming years, thus reducing taxable income. Those reverse mortgage withdrawals might also fund contributions to SEP retirement accounts (out of which withdrawals can be deferred until age 72). As your consulting income rise, these two tactics can nicely reduce Medicare premium “bracket creep”.

https://mutualreverse.com/david-garrison

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

Hopefully, your list of “daily living activities” includes things such as dancing, golfing, cooking favorite dishes and winning at cards. Odds are, however, as the U.S. Department of Health and Human Services cautions, that as you age, you’ll need at least some assistance with what they define as Activities of Daily Living – bathing, dressing, feeding, ambulating, and continence management.  That kind of assistance with routine needs is offered at a myriad of assisted living facilities and nursing homes, but you, like a steadily growing number of people planning their retirement, envision “aging in place” right in your own home. 

Because assistance with ADLs not covered by either regular health insurance or by Medicare, purchasing long term care insurance is one of the best ways to prepare for those healthcare costs. However (as Tevye bemoaned in Fiddler on the Roof), “It isn’t easy!” Premiums for long term care insurance policies are in the four figures annually, and are often subject to rate increases over the years. 

A reverse mortgage can be the answer, providing income to pay those premiums – or to prevent your long term care insurance policy from lapsing. Your mortgage can be set up as a growing line of credit, becoming your safety net in the event of rising premium costs.  You may opt for a monthly or quarterly cash inflow to cover premium costs beginning at retirement or postpone withdrawals until needed. It will be comforting to realize that, with your reverse mortgage in place, during those inevitable “down market “periods, there will be no need to put further strain on your investment portfolio assets.

Aging in place – and in style – starts with good planning now!

https://mutualreverse.com/david-garrison

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

Like so many other older adults, you cherish the memories you’ve created in Indiana, and have decided to spend your retirement years here in your Hoosier home.  Still, as each winter approaches, prospects of snow shoveling and blistering winds – not to mention the risk of falling on icy ground – have you thinking about owning a second home in a sunnier climate, becoming, like so many of your friends, a “snowbird”.

While you may well have the resources to make a substantial down payment on a winter home in a warmer climate, perhaps even enough to totally finance the cost of a second residence, you’re reluctant to deplete your retirement assets or overhaul your investment strategy. A reverse mortgage might offer the perfect solution.

In fact, one of the uses of an FHA-insured reverse mortgage involves eliminating the monthly mortgage payment on your existing home, then using the reverse mortgage proceeds to make conventional mortgage payments on a winter home in a warmer location. And, if you are in the enviable position of having a paid-up mortgage on your present home, those reverse mortgage proceeds might well be enough to allow you to pay all cash for that second home, all without affecting your investment portfolio.

You understand that, while there will be no mandatory monthly mortgage payment on the reverse mortgage on your primary home, you’ll continue to be responsible for property taxes, homeowners insurance, and home maintenance costs year-round, even during the months you’re off to sunnier climates.

Think about it – if just imagining those long walks on the beach, riding a bike in the early evenings – all winter long – is enough to bring a smile to your face, you might just be ready to become a Snowbird.

https://mutualreverse.com/david-garrison

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

In “5 ways to help protect retirement income,” Fidelity Viewpoints lists 4 to-dos and 1 big don’t. What’s the big no-no? Withdrawing too much from savings. Spending your savings too rapidly can put an entire retirement plan at risk, and maintaining a sustainable withdrawal rate is paramount. But with today’s historically low interest rates, “sustaining” that 3-4% traditionally recommended retirement withdrawal rate has become a major challenge.

https://www.fidelity.com/viewpoints/retirement/protect-your-retirement-income

Reverse mortgage can become a “buffer” asset, helping to support your spending needs. And, since the “return” on your mortgage asset is not correlated with either stock or bond market results, your line of credit it can be relied upon when your portfolio is simply failing to “do the trick”, “tiding you over” during market downturns – or when unexpected expenses arise.

You may not have an immediate need for funds, and it is reassuring to realize that you pay no interest on un-borrowed funds. Unlike a regular line of credit at a bank, with a reverse mortgage line of credit, as long as you have a remaining balance, your line of credit can never be frozen or closed. What’s more, the unused portion of your credit line grows, using the same rate at which the loan accrues interest! (plus the ½% on going MIP) It’s no wonder that the line of credit has become the most popular way for borrowers to use a reverse mortgage.

You’ve worked hard to accumulate those retirement assets. Now a reverse mortgage line of credit can help you avoid that one big retirement planning no-no.

https://mutualreverse.com/david-garrison

Not intended as financial planning advice. Please consult a financial advisor

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

No doubt about it – when it comes to living off your retirement savings, the “big bad wolf” is called Sequence of Returns. Now, you’re no stranger to the stock and bond markets – after all, you’ve been putting money into your investment portfolio for as long as you can remember. But now, you realize, the time has come to begin systematically withdrawing funds from your investments in order to supplement your Social Security benefits and to pay for both basic living expenses and those lifestyle luxuries you’ve been waiting to enjoy.

Over the years, you’ve become accustomed to the regular ups and downs in the investment markets, and you’ve not been too much of a Nervous Nellie about it, either. You’ve seen the “peaks and valleys”, following the news about the ups and downs of the market, all while mitigating the worst effects of those “downs” by diversifying your holdings. In fact, you’d come to conclude, it didn’t matter so much when those market ups or downs occurred – you just kept investing, confident that the general trend would continue on its historical upward trajectory.

Now that you’re periodically taking money out of the portfolio, however, the timing of returns is likely to matter a whole lot more. Uh-oh. If a high proportion of negative investment returns should happen to occur in the beginning years of your retirement, selling investments to support your cash flow needs could quickly dissipate the assets needed to sustain withdrawals in later years. You need a buffer, one that doesn’t involve taking assets out of the market just when those assets need to work their hardest for you.

Buffer assets are those available outside your financial portfolio, assets to support spending during periods when your investments are in a “down” period. A reverse mortgage line of credit, since it is not vulnerable to stock market unrest, could be there to provide the stability of income you’ll need throughout your retirement years.

Structured as a home equity line of credit, your reverse mortgage, in short, won’t let the big bad Sequence of Returns wolf blow your retirement down!

https://mutualreverse.com/david-garrison

Not intended as financial planning advice. Please consult a financial advisor