USING HOUSING WEALTH TO FUND A SPECIAL SCHOLARSHIP
Now both “officially” retired, you each continue to bring in gig income from personal coaching and speaking engagements. With no children or grandchildren (and therefore no need for extensive living space), you’ve nonetheless made the decision to spend your retirement years in the home you’ve occupied for decades, and which you’ve kept in excellent repair.
Despite the vagaries of the market – and the alarming increase in gasoline prices – you feel pretty well prepared financially going forward.
In fact, you’ve been giving thought to establishing some kind of annual scholarship fund through your alma mater (the university where the two of you met and earned both undergraduate and advanced degrees). The goal is to encourage students to select majors in environmental studies.
While you’re both committed to the concept, there is some concern about tapping your investment portfolio or retirement accounts to maintain the funding requirements years into the future. There is the possibility of using stock you inherited from your own parents as the original donation for the first year. Going forward, though, neither of you is comfortable committing one large upfront sum – you have decided you’d prefer to make this an annual gift.
Once having funded the first annual scholarship with the stock, going forward, you might consider tapping into your own housing wealth using a reverse mortgage set up as a line of credit. Each year, you can withdraw from that line of credit, tax-free.* (Your tax advisor will verify that you can still qualify for a tax deduction on the contribution to the scholarship fund!)
You’re rightly concerned about your own financial “safety environment” in future years. Yet using the equity in your home as the scholarship funding source avoids the need for you to tap the investment portfolio or retirement account, all while realizing your dream of encouraging those who’ve chosen the field of environmental studies.
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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