When you retired from full time employment just four years ago, you never imagined becoming a “poster child” for the “negative sequence of returns” you’d read about in the magazines and journals.. Divorced ten years ago, you were awarded sole ownership of your home, and are only months from totally retiring the mortgage on it. As a small business coach, you do bring in a semi-regular income stream to augment the monthly systematic withdrawals from your IRA Rollover Account and your Social Security benefit.
In recent months, you have been in prospecting mode for new coaching clients, while also moonlighting as a “picker” at local retailer in order to keep up with rising costs. Normally a patient investor with an eye on long term rewards, you have always understood that there will be market fluctuations. Now, however, you’re undeniably concerned with the drop in value of the Rollover account, watching the cascading effect (downwards) exacerbated by your regular cash withdrawals. You’ve considered taking out a home equity line of credit as a temporary income “fix”, but with a near-term meaningful stock market rally seeming less and less likely, that would feel like going from the proverbial frying pan into the fire.
It appears that the equity you’ve build in your home might provide a solution, not in the form of a second forward mortgage, but with a HECM reverse mortgage set up as a line of credit. In accessing your housing wealth in this way (substituting tax-free withdrawals from your own home equity for those taxable withdrawals from the IRA account), you might well be in a better position to weather the current stock market turbulence without dangerously drawing down your investments.
With a reverse mortgage line of credit, your home equity can function as a storm shelter during stock market turbulence.
David Garrison
Home Equity Retirement Specialist
NMLS # 1595194
Serving the State of Indiana
p (317) 644-2595 c (765) 516-0130
e [email protected]
2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894