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#22 Switch from Portfolio SWIP to Reverse Mortgage Draw


David Garrison
Home Equity Retirement Specialist
NMLS # 1595194
Serving the State of Indiana
p (317) 644-2595 c (765) 516-0130
e [email protected]

2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894

At age 67, you’ve just retired and already are experiencing some concern about the Systematic Withdrawal Income Plan you so carefully planned with your advisors. In just the past few months, you’ve begun to see some price escalation in many of the goods and services you use every day. What’s more, you’re hearing differing predictions on the near-term direction of the stock market, and you’re worried that all those carefully prepared projections and charts were overly optimistic in terms of your investments being able to provide you with sufficient income to supplement your Social Security and pension benefits.

Reassuring factors include the Long-Term Care insurance policy you purchased seven years ago and the fact that the mortgage on your home is all but paid in full. Still, given the volatile political situation, you don’t want to chance drawing down your investments now, when you’ve hardly begun this new phase of your financial life.

Consider applying for a reverse mortgage, taking monthly withdrawals out of your line of credit in place of the monthly sell-off of assets in your portfolio. The concept is that, while your portfolio is subject to variations in return, the line of credit is a fixed amount, with growth occurring (that matches the interest accruing) on the untapped portion. If at some future date, your portfolio has grown sufficiently to make you more comfortable resuming withdrawals, you can stop taking money out of your line of credit.

Most important, as unexpected one time need for cash arises, rather than worry whether it’s a good time to sell portfolio assets, you can simply draw cash from your reverse mortgage line of credit

* 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.

* Not intended as financial planning advice. Consult a financial analyst