“Perhaps the best protection from market downturns is a steady stream of income,” Penelope Wang pointed out in a recent issue of the AARP Bulletin After mentioning Treasury Inflation Protected Securities, or TIPs, the author suggests another option: income annuities. In fact, single premium immediate annuities can protect against both longevity and market risk, Dr. Wade Pfau, author of the Retirement Planning Guidebook adds.
Just last week in this Shift Into Reverse blog, we suggested that those interested in securing a future source of steady income can choose to use their housing wealth to create a deferred fixed annuity. With the value of residential equity having escalated rapidly in recent years, having clients consider setting up a “standby line of credit” based on that increased value might prove in hindsight to have been highly advantageous recommendation, requiring virtually no out-of- pocket cost to the clients, and causing zero drain on their investment portfolio.
From a financial planning standpoint, this tactic allows homeowners to utilize the benefit of a unique growing line of credit, regardless of home appreciation. When the time is right, clients can initiate the fixed monthly withdrawals in the form of reverse mortgage “tenure” payments. Best of all, the “growth” in the Line of Credit occurs independent of any overall changes in the residential real estate market. (Meaning the home value is locked in at closing and any future depreciation is irrelevant.)
A government-guaranteed reverse mortgage equity line of credit can be a way for clients to use housing wealth today to structure fixed annuity income for tomorrow.
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. 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