USING HOUSING WEALTH TO FUND PROTECTION PLANS
Now both fully retired (as of the end of 2025) from your full-time jobs (you continue to each bring in a modest amount in gig income), you’re devoting serious effort towards streamlining your bill-paying and examining your recordkeeping “systems” and reviewing all the different kinds of insurance you have, with the goal of creating a “calendar” of premium payments and of re-assessing coverage. (Together you have homeowner’s insurance with a liability rider. You each have a Medicare supplement, and each is covered by a long-term care insurance policy. As a next step, you’d talked about choosing dental insurance plans.
With more time available now to watch daytime TV, you’ve been struck by the sheer volume of pharmaceutical ads touting one “cure” after the next. In addition, you’ve been seeing commercials about the cost of funerals nowadays, offering prepaid funeral insurance. Now you intend to research that form of preplanning as well.
Long ago you made the decision to remain in your home after retirement. Given that most of the work to make the place more “age-suitable” has been completed and paid for, from a
budgetary standpoint going forward, it looks as if you have enough “wiggle room” to accommodate all the premium costs for the different kinds of insurance, including the dental and prepaid funeral plans if you move ahead with those. On the other hand, you don’t want to feel squeezed, since these costs are continually rising.
Since you appear to be seeking “structure” in funding different forms of insurance protection, you might consider using your “housing wealth” as the “protection funding source” in the form of a reverse mortgage set up as a line of credit. Once you have your “calendar” of insurance premiums organized, the equity in your home will begin to serve as the source from which you draw, perhaps quarterly, to pay all the different insurance premiums.
Unlike withdrawals from investment or retirement accounts, those reverse mortgage distributions will be tax-free.* Meanwhile, the “unborrowed” portion of your housing wealth will be guaranteed to grow, tax-free,* at the same rate of interest as that being charged on the mortgage balance itself. Most important, your housing wealth can be the key to “insuring” now and future costs, staying home while staying protected..
https://mutualreverse.com/david-garrison
*Please consult a tax advisor.
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
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