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.