As a widower now into your tenth year of retirement, you have felt able to manage your financial affairs, making calm decisions about investments and lifestyle choices. Given the recent market drop, you realize you would like to be experiencing a higher degree of ‘certainty”. Your home is in good repair and has been mortgage-free for years, but you’re concerned with the rise you’re experiencing in car maintenance and gasoline costs, not to mention groceries and even in your electric bill.
Both your accounts (an IRA rollover account, out of which you just took your first mandatory withdrawal) and an individual account are invested largely in S&P 500-based managed accounts, with one or two individual stock holdings. Following a review of coverage with your insurance agent, you’re considering moving some of your investment dollars into a fixed tax-deferred annuity.* The appeal to you is that an annuity can be turned into a regular lifelong income stream, which would help fill the gap if the everyday costs of living continue to increase at an unsustainable pace.
One course of action you might consider is a reverse mortgage, utilizing a payout method known as a tenure payment. In this way you can “annuitize” your housing wealth rather than converting your investment assets into a fixed annuity. So long as you are still occupying your home, keeping up with homeowner’s insurance, property taxes, and home repairs, you would receive equal monthly mortgage payments** for the rest of your life (the concept is similar to the fixed insurance company annuities you’re considering). You might start out with a reverse mortgage line of credit, then later convert to a tenure payout, in which income payments would continue for life, regardless of changes in the value of your home, and regardless of the mortgage loan balance!
You’ll certainly want to consult your estate planning advisor before committing to such a plan, but the advantage would be keeping your investment portfolio intact, while stabilizing your monthly inflow of cash.
Your housing wealth can be used to “steady” your future income stream, mitigating your concerns about rising costs of living.
https://mutualreverse.com/david-garrison
*Please consult a tax specialist. **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