At age 63 and recently retired from a long-time, top-level corporate sales training position, you’re looking forward to having greater control over your own time. An idle existence, on the other hand, would never be to your liking, and the plan is to develop an online sales training business offering a series of advanced, top-of-the-line courses in sales and marketing, focusing on four specific industries. While the “students” might be located anywhere in the world, the plan is to hire four locally-based instructor/trainers, who will earn teaching fees in addition to earning “commissions” for recruiting enrollees. 

The relatively modest capital investment needed will go towards converting two of the rooms in your home to “studios” for video recording, involving both some structural redesign and purchase of equipment. You’ve kept the home itself in excellent repair, and it became mortgage-free eight years ago. Meanwhile, as you work to get the new venture “off the ground” your own ongoing living expenses are covered by regular withdrawals from your IRA Rollover and personal investment accounts. You’ve maintained an excellent credit rating, keeping debt very low, and qualifying for a home equity line of credit should not be a problem.  

While leveraging the equity you’ve built up in your home over the years as the capital “boost you need to get your training business off the ground, you might consider doing that with a reverse mortgage, rather than using traditional mortgage financing. With a reverse mortgage line of credit, you’ll need to pay the property taxes and insurance, but there will be no ongoing required payments. What’s more, the “draws” you take out of the equity line of credit will be tax-free so long as you continue to occupy the home. Once the business begins to generate net profits, you may choose to partially or fully repay the loan. In the meanwhile, the untapped portion of your equity will be credited with the growth at same rate as the interest being charged on the outstanding loan balance. 

Putting your equity “to work” can make turning your home office into a sales training “command hub” a real possibility.  

https://mutualreverse.com/david-garrison

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

Please consult a tax advisor. 

After retiring at the end of 2022 (at the age of 67), you began collecting Social Security benefits in 2023. Your wife retired at the end of last year, but she is not quite of age to qualify for a full benefit. Your plan was to wait until October of this year to “turn on” her “Social Security spigot”. Preparing your 2023 tax return, though, was a wake-up call, as you realized just how much of your own Social Security is being lost to taxes. 

Your home is fully paid for and has been kept in good shape. Still, continuing past this year to defer your wife’s Social Security benefits would mean taking more money out of both your rollover accounts (which would trigger tax as well!). A couple of years ago, you inherited a piece of property, which could eventually be sold, but that would still not provide enough to allow deferring Social Security for very long. Is a mortgage line of credit on your residence your best option, you wonder?

Using your housing wealth as a source of regular income in order to defer Social Security benefits can be an option. But rather than borrowing money in the form of a home equity line of credit on a traditional “forward” mortgage, consider using a reverse mortgage. That way, withdrawals will not generate taxable income, and there will be no need to repay the loan until you have either moved out of the home (or until you have both died). You, of course, retain the title to your home so long as you continue to maintain it and keep the property taxes and insurance paid.

Later, should you end up selling the inherited property you mentioned, you might wish to use the sale proceeds to “replenish” your reverse mortgage equity, which is always credited with growth at the same rate as the interest being charged on the outstanding loan balance. Meanwhile, as your wife continues to suspend her Social Security benefit payments, she will be earning delayed retirement credits, resulting in a higher ultimate monthly Social Security payout once she reaches age 70.

As Charles Rawl, CFP®, RICP® wrote in Kiplinger, “The intelligent use of a reverse mortgage, particularly a federally insured home equity conversion mortgage (HECM) line of credit, could extend an individual’s or couple’s retirement resources in a way that more traditional strategies cannot.” 

That April 15 reminder you got of the tax on Social Security benefits? It might point your way to a savvy retirement income management plan based on your own home.

https://mutualreverse.com/david-garrison

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

After close to thirty years working abroad as an international education consultant, at age 74, you’ve moved back to the U.S. to be closer to family. For the past year, you’ve been renting an apartment in Indianapolis, waiting for the right time and the right spot to build your “forever” (or at least “for the foreseeable future”) home. You’ve been talking to different builders and are just about ready to pull the trigger on a medium-priced site in a neighboring township community. You’re wavering on whether to purchase the home for cash, avoiding the need for mortgage payments. At the same time, you hate the idea of tying up so much of your capital.

Financing the purchase of your new home with a HECM-for-purchase reverse mortgage might allow you to tie up less of your capital while still avoiding monthly mortgage payments. Using a combination of your own funds and a government-insured loan, the HECM-for-purchase plan consolidates two financial transactions into one. You would be able to hold on to more of your own capital for other needs, and repayment can be deferred until such time as you no longer occupy the home. 

Now back home in the USA, you’ll be preserving more of your liquid assets, all the while “building”, not only a new house itself, but, potentially, building housing wealth!

https://mutualreverse.com/david-garrison/

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

While you have both been U.S. citizens for many years, some of your fondest childhood memories revolve around Brothers and Sisters Day in Canada. Fraternal twins, your brother and you have remained very close over the years. At age 68 and single with no children, you are still actively self-employed on a part-time basis; your brother and sister-in-law both retired from the school system three years ago.

Tragically, just last week, at your annual observance of Siblings Day (as it is called here in the States) you learned that the latest diagnosis of your brother’s long-standing medical issues is forcing some immediate decisions. While he does have Medicare and supplemental insurance, the bulk of the costs of the one treatment plan that appears to hold the most promise are probably not going to be covered.  

Rather than offering to help the couple pay each medical bill as it arrives, you would like to make a one-time six-figure cash gift, opening an account in your brother-in-law’s and sister-in-law’s name from which they can draw funds as needed. The only issue is that the bulk of your own financial assets is in tax-deferred accounts (one IRA rollover account and the Solo 401k) to which you contribute out of earnings.

Consider using your housing wealth (as opposed to your tax-deferred investment accounts) as the source of funding for your generous gift to your sibling’s family to help them pay for non-insurance-covered medical treatments. Set up as a line of credit, a Home Equity Conversion Mortgage will allow you to either make the one-time gift you envisioned, or to periodically gift sums of money (as the costs of the treatment protocol become clearer), all without increasing  your own income tax liability.

Far from the sibling rivalry that so often appears in families, in helping remove any financial barriers that might have prevented your twin from accessing the most advanced medical treatments for his condition, a reverse mortgage might well turn out to be the perfect vehicle for you to practice sibling chivalry! 

https://mutualreverse.com/david-garrison/

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

At the urging of your adult children (neither of whom lives in this state), you paid quite a number to check out senior living communities in and around the city. As a very socially active widow, it quickly became plain to you that you treasure your independent lifestyle and would not be happy in a community living environment. Having made the decision to “age in place” (you’ve been reading the AARP publications on the subject), you realized that your present “place”, while fully paid for and in good repair (not to mention holding many precious memories), is simply too large a property to contemplate maintaining in your later years. As you move into our mid-seventies, you envision living in a one-story home. One aspect of your prior planning is quite reassuring is that, years ago, you purchased a Long-Term Care policy that can be used to fund healthcare at home.  

As you’ve come to realize, “aging in place” need not mean remaining in the “place” you now own, but could describe independent living in a smaller, less-maintenance-demanding home. While you have sufficient cash reserves to make a substantial down payment on a new home even before you’ve sold this one, you don’t want to continue maintaining two homes at once. 

One way to ease the transition from a financial point of view is to apply for a HECM (Home Equity Conversion Mortgage) on your existing home, using the loan proceeds to finance the balance of the purchase price of your new “place”. When your existing home sells, the reverse mortgage loan will be repaid out of the proceeds. The HECM for Purchase does a sort of “double duty”, allowing you to buy the new home before you’ve sold the old, bypassing the need for you to pay two sets of closing costs.

As a socially active senior who, at the same time, treasures her privacy and independence, aging in place – but not in your old “place” could prove the best of both worlds!

https://mutualreverse.com/david-garrison/

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.

As an advisor who deals primarily with high-net-worth individuals and couples, you’ve come to understand the many ways in which using housing wealth can help your clients preserve and grow their investment assets, avoiding wealth depletion through taxation or ill-timed withdrawals. Ironically, a recent conference breakout session on life settlements reminded you of the early – and still very valid – concept of reverse mortgages as tactics “of last resort. The presenter cited a chapter from The Wall Street Journal Complete Personal Finance Guidebook, in which author Jeff D. Opdyke acknowledges that, “People often get to a point in retirement where their income doesn’t meet their financial means.”

While your own career has been devoted to helping clients, through good planning and investment diversification, prepare for a financially secure retirement, treating both their housing wealth and their insurance policies as wealth enhancement and wealth protection tools, the breakout speaker and the Opdyke remarks called your attention to insurance and housing assets as basic support resources when life doesn’t work out as planned.

“There are two potential assets that retirees often overlook,” Opdyke writes – a home and a life insurance policy. “Both can provide a substantial income,” he points out, and both allow retirees to raise money for retirement expenses they might otherwise have a hard time covering or might have to ask their children to help them pay for.” What’s more, Opdyke points out, while life settlements involve selling one’s policy to investors, who become the beneficiaries upon the death of the insured, reverse mortgages do not involve ceding ownership of one’s property.

It’s interesting that, as James Burton observes in Wealth Professional Canada, “Reverse mortgages don’t immediately resonate with financial advisors because they are perceived to be reserved for a marketplace rooted in need.” In your case, having viewed reverse mortgages as tool for high-net worth investors, the breakout session you attended served as a reminder that reverse mortgages can be valuable tools at both ends of the spectrum.

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https://mutualreverse.com/david-garrison/

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here(and scroll down).

Because each of you has survived a near-death experience (a bout with cancer in her case, a serious injury in yours), you are determined, within the limits of prudence, to check certain items off your world travel bucket list in the early years of retirement, rather than waiting until later.

Your spouse, retired from her full-time position since last year, does part time consulting work.  With your own official retirement set for the end of this calendar year; you already have a regular customer base for your part time business coaching service. The mortgage on your jointly owned residence has long been fully paid, and the home was remodeled when you married eight years ago.

Each of you has been married before; neither of you has children. While potential future health costs remain a major concern, you will each be covered by Medicare and a supplement. While your long term care policies would be unlikely to cover the total costs of future illness, you feel you’ve done what you can to prepare for the worst. Now you’re determined t make these next years “the best” they can be.

Consider setting up a reverse mortgage on your home as a “brace” against possible health costs in future years. With that “reserve fund” in place, you can use your current sources of income to start checking things off your world travel “bucket list” over the next few years. You’ll continue to own and occupy the home, of course, with no requirement to either borrow against the equity nor to make any payments.

“Repositioning resources” by using your housing wealth to “backload” resources in preparation for the later years of retirement can allow you to “frontload” the funding for your near-term adventuring.

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https://mutualreverse.com/david-garrison/

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here (and scroll down).

With the bulk of your invested assets in tax-deferred accounts, you’re pleased with this year’s portfolio results. You’re also pleased not to have been forced to tap those accounts, managing living; expenses with a combination of income from part time work/consulting assignments, rents from some income producing property your spouse inherited, and regular withdrawals from a joint investment account. With your home paid for and in good repair, you anticipate being able to wait the four or five years until IRA withdrawals become mandatory.

You’re somewhat concerned (moving further towards the election and given the dangerous international climate), that if your joint portfolio were to decline significantly, you’d be forced to tap into those tax-deferred accounts after all. You’re considering moving at least a third of the money from the high growth profile to a more conservative mix of investments.

Without in any way attempting to predict the near-term – or longer term – direction of the markets, you might consider taking out a reverse mortgage loan on your primary residence, set up as an equity line of credit. That way, should your portfolio asset decline (in either the tax-deferred or the joint accounts), you might pause withdrawals, using tax-free* reverse mortgage withdrawals to “pay the bills”. That would allow you to continue deferring taxable withdrawals from the rollover accounts and avoid the need to sell assets that might have been affected by a stock market townturn.

With no need to make monthly mortgage payments** on the reverse mortgage loan, you can continue to take a longer-term view in making portfolio investment choices. Meanwhile, should the future investment performance be better than feared, you can stop tapping your housing wealth. The unused portion of your equity will be credited with growth at the same rate as the interest being charge on the outstanding loan balance.

By enlisting all your resources, rather than just the investment accounts, you can enjoy a buffer against possible stock market declines.

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here (and scroll down).

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*Please consult a tax advisor. **Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.

https://mutualreverse.com/david-garrison/

As recent retirees who only recently attended an intense three-day investment seminar on portfolio allocation, you two are feeling yourselves in somewhat of a quandary. Not only does your combined portfolio consist of almost 85% equity (a category the speaker dubbed “owner investments”), but the greater portion of that equity consists of the stock of the company where you were both employed up until 2021. The happy news, of course, is that the growth in that stock has been phenomenal. With interest rates possibly going to decrease, changing to some “loaner” investments might be a good idea, you’ve concluded, but you are still reluctant to divest yourselves of the stock that has been so much a part of your lives.

In other aspects of your planning, you feel comfortable with your preparations, having filled out the  5 Wishes forms for your estate planning and making sure your home is in good shape, including a new hot water system and roof. The house is owned jointly and fully paid for.  

It appears you’ve taken responsibility for planning your affairs as you begin the retirement phase of your lives. Without in any way offering investment allocation or legal advice, I might suggest that, as you make asset allocation decisions about “owner” and “loaner” investments, that you include the equity in your residence to be part of the planning.Right now your “housing wealth” represents an even greater allocation to the “owner” side of the “investment pie”. Rather than rebalancing your asset allocation by selling your existing stock holdings and purchasing “loaner investments” such as bonds, you might set up a non-recourse reverse mortgage loan on your home, which would represent a “loaner investment” in and of itself.  Not only will there be no monthly mortgage payments due, but any unused portion of your equity will be credited with growth at the same rate as the interest being charged on the borrowed funds, “adding to” the “loaner” portion of your overall asset allocation.

In short, a reverse mortgage can help you use an “owned” asset to diversify into “loaner” investments.

Readers, if you’d like to see what you might qualify for with a reverse mortgage in Indiana, or to download your Reverse Mortgage Guide Click Here (and scroll down).

https://mutualreverse.com/david-garrison/

Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees. David Garrison, NMLS ID 1595194. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Indiana-DFI Mortgage Lending License 43321. Michigan 1st Mortgage Broker/Lender/Servicer Registrant FR0022702. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org Equal Housing Lender