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#44 Using A Reverse Mortgage To Add Portfolio Diversification


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

As a first step in launching the next great phase of your life, you’ve recently accepted an early (at least earlier than you’d originally planned!) retirement buyout offer from your employer.You’d spent the past thirty-plus years accumulating memories at that company, while also accumulating substantial holdings in its common stock. And, since the awarding of even more equity was part of the buyout package, you realize that your investment position in this one stock now comprises well over half your entire portfolio.

While you consider yourself to be basically non-skittish, the type of investor who takes the long view of the investment markets,  that lack of diversification troubles you, particularly since you’re aware of certain industry developments that you suspect were behind your employer’s decision to execute a reduction in force in the first place. Liquidating shares is an option, of course, but the capital gains tax is a burden you’re reluctant to shoulder, at least not until you’ve “gotten your bearings” as a retirement “newbie”.

There is one asset you may not have considered as you launch your retirement strategy – the equity in your own home. Using a Home Equity Reverse Mortgage Line of Credit, you can begin to add assets to your stock portfolio. By selecting industries that are negatively correlated with the one from which you’ve just retired, you enhance the safety – and the growth potential – of your overall holdings. And with no tax liability triggered as you draw on your non-recourse loan, you accomplish diversification without needing to liquidate large chunks of your ex-employer’s stock.

Through a reverse mortgage strategy, you draw upon a now asset in order to effect dynamic improvement in another!

Not intended as financial planning advice. Consult a financial advisor