Over the years, when the grandkids were younger, the two of you always made efforts to help fund their college costs by both making direct cash gifts at holiday time and also by contributing to both their educational savings accounts. Now widowed yourself and with both grandchildren now started on their respective professional careers, you considered the college funding challenge a thing of the past. To your dismay, during the Christmas gathering, you discovered that lingering student debt continues to be a big challenge for both the grandkids and their parents. (Apparently, a recent Supreme Court ruling cancelled some debt relief on which they’d been counting.)
Years ago, as part of your estate planning, you’d included student loan payoffs as part of your legacy to your son and daughter (to the extent they had signed for student loans for their children), but thought that issue was largely a thing of the past. Now in the process of updating your estate planning documents, you’re thinking in terms of more immediate assistance. At the same time, you need to consider what impact significant monetary gifts might have on your own retirement finances. (With a fully paid for home in excellent condition, you are still concerned with possible future health costs.)
Consider using the equity in your home to help the two graduates and their parents repay the student loan debt. With a Home Equity Conversion Mortgage, or HECM, you will be able to tap your housing wealth in the form of a line of credit, using the funds to bring meaningful relief to your children and grandchildren while the student loan debt relief issues are being debated by the U.S. Department of Education. Most important, you will not be impacting your own retirement finances.
A reverse mortgage can be a way to offer relief to your adult children, allowing the grandchildren to focus on building their careers and you to enjoy your own retirement.
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).