2169 East Rutland Lane, Martinsville, IN 46151
Corporate NMLS #1025894
You’ve both always carried on a very active lifestyle, and the first couple of years since your retirement have featured a high level of sports-related leisure activities. To a significant extent, the pandemic “crimped your style” during the past year, but you have high hopes that 2021 will allow you to get back on track. Meanwhile, the pandemic has changed your financial outlook somewhat, in that two of your children have needed help, one due to a job loss, the other due to unexpected medical costs. In order to provide that much-needed parental assistance, you had to liquidate some of your own portfolio assets, which unfortunately increased the income you expect to report on your 2020 tax return.
While you have a reassuringly low level of debt and are covered by Long-Term Care insurance, last year’s events have caused you some concern about maintaining adequate “cushioning” against unexpected future needs. Of course, you would like to avoid triggering excess taxes through unplanned withdrawals from your respective retirement portfolios.
There’s a possible better way. Rather than tapping your portfolios, consider using one of your largest assets as a buffer against unexpected future contingencies. Once having established a Home Equity Conversion Mortgage (HECM) line of credit, you’ll be in a position to help your children deal with setbacks as you judge fit, doing that without altering your investment strategy – and without triggering any negative tax effects for yourselves.
A reverse mortgage might well be your path for rebounding from past, pandemic-induced costs, and for feeling prepared for whatever the future has to bring.