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#47 Using A Reverse Mortgage To Avoid Depleting Savings


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

In “5 ways to help protect retirement income,” Fidelity Viewpoints lists 4 to-dos and 1 big don’t. What’s the big no-no? Withdrawing too much from savings. Spending your savings too rapidly can put an entire retirement plan at risk, and maintaining a sustainable withdrawal rate is paramount. But with today’s historically low interest rates, “sustaining” that 3-4% traditionally recommended retirement withdrawal rate has become a major challenge.

Reverse mortgage can become a “buffer” asset, helping to support your spending needs. And, since the “return” on your mortgage asset is not correlated with either stock or bond market results, your line of credit it can be relied upon when your portfolio is simply failing to “do the trick”, “tiding you over” during market downturns – or when unexpected expenses arise.

You may not have an immediate need for funds, and it is reassuring to realize that you pay no interest on un-borrowed funds. Unlike a regular line of credit at a bank, with a reverse mortgage line of credit, as long as you have a remaining balance, your line of credit can never be frozen or closed. What’s more, the unused portion of your credit line grows, using the same rate at which the loan accrues interest! (plus the ½% on going MIP) It’s no wonder that the line of credit has become the most popular way for borrowers to use a reverse mortgage.

You’ve worked hard to accumulate those retirement assets. Now a reverse mortgage line of credit can help you avoid that one big retirement planning no-no.

Not intended as financial planning advice. Please consult a financial advisor