The two of you have always felt blessed in having your only two grandchildren living a mere 30 miles away. Even with you, both in your mid-sixties, still working full time, you’ve enjoyed having the grandkids spend many a weekend at your home. Unfortunately, your son-in-law has filed for divorce; he has already moved to Ohio in order to take advantage of a job opportunity – and, you’ve learned, to share his life going forward with a new partner.
Your daughter is a traveling nurse, regularly away from home. Your first thought was to have her and the children move in with you during this terrible transitional period. That, however, would mean moving the kids out of their school; district and away from their friends and activities. With attorney meetings and mediation sessions being scheduled, your daughter is being forced to consider turning down out-of-town nursing assignments for the next few months, which she can ill-afford to do.
You’re assessing your own finances in order to come to the rescue quickly. As a couple, you are essentially debt free, but, other than modest cash reserves, all your investment resources are inside a 401K and a SEP, and the tax ramifications would be very negative.
One tactic to consider is using the equity built up in your home to generate cash to help your daughter and grandkids. With a reverse mortgage equity line of credit, you will be able to make tax-free withdrawals of cash on an as-needed basis, with no requirement to make monthly mortgage payments. With your financial help, your daughter would be able to spend more time at home, allowing the children to remain in familiar surroundings with no interruption to their schooling or activities.
Once the divorce and support negotiations have concluded, your daughter will be in a better position to evaluate her work arrangements and make the best long term career decisions for herself and her children. The two of you, meanwhile, will have provided needed transitional support without negatively impacting your own retirement goals.
Your housing wealth can be the secret to helping your grandkids weather the upheavals of divorce without adding the upheaval of changing home or school.