NPR: People Need Reverse Mortgages to Tap Home Equity in Retirement

NewImageNational Public Radio’s Here and Now show featured a segment on what type of retirement Baby Boomers are facing.

Professor Alicia Munnell, director of the Center for Retirement Research at Boston College, talks with Robin Young about the prospects for retirement and the different options available in terms of funding.

“We need to figure out some way for people to draw down their 401k balances in an orderly fashion,” said Munnell.  “Another area where I think there is potential, for most people their house is a really important retirement asset.”

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Munnell said she likes reverse mortgages and the products are a mechanism that “people are going to need to tap their home equity during retirement,”

To listen to the segment, see here.

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  • Some of the comments under this segment are amazing. People need guaranteed retirement income, RM’s and annuities can provide that. They are obvious solutions to me, but so many people are intent on rejecting them. Will the nonsense ever stop?

  • This would be a great marketing tool with the exception of the usual misinformation. She states that you pledge your house to the bank and the bank gets it upon your death. Why can’t they get it straight? Pledge yes but they fail to say that if there is equity the heirs get it and if they want to keep the home they pay off the RM.

    • thekeys,

      Pledge is a legal term which has the overtone of collateral but in a personal property setting. There is no recorded deed of trust or mortgage.

      Reverse mortgage are plain and simple mortgages with unique characteristics most of which favor borrowers. It is because originators talk about RMs as if they are not mortgages but are “equity releases” or “equity conversions” that people honestly believe they have lost their homes. We give them that idea, no one else.

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