Retirement Initiative Launches Interactive Planning Tools

A “Target Your Retirement” calculator and other tools in beta testing from the Financial Security Initiative at Boston College allow users to answer simple questions about current assets and behaviors in order to present a projected target monthly income at age 62. Based on an individual’s date of birth, current savings, income and home value, the tool calculates a desired monthly income and walks users through steps that can help achieve that income.

Three target areas to improve retirement income are “control spending”; “work longer”; and “use my house,” which includes downsizing and using reverse mortgages.

An additional interactive resource called “Curious Behaviors That Can Ruin Your Retirement,” poses questions about preferences that indicate retirement planning habits. Together, the tools can help paint a picture of an individual’s retirement situation, and urge him or her to take steps toward accomplishing that goal, with housing being a major component.


One of the “most powerful ways to tap home equity,” says an accompanying guide titled “Managing Your Money in Retirement,” is a reverse mortgage. “A reverse mortgage,” the guide says, “is a new, unfamiliar, and somewhat complicated arrangement. But it 1) allows you to stay in your house for the rest of your life; and 2) provides tax-free income.

Further, it says, “most households entering retirement own their home, and the equity in their home—the value of the house less any mortgage—is often greater than their 401(k)/IRA savings. Even if the mortgage is paid off, housing costsinsurance, utilities, upkeep, and taxes—are often a retired household’s largest expense. If needed, you can tap home equity to boost inadequate incomes, cut costs or pay big medical or nursing home bills.”

Visit The Financial Security Project and its web-based interactive tool.

Written by Elizabeth Ecker

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  • Typical of those not knowing finances is to say things like: “Three target areas to improve retirement income are ‘control spending’; ‘work longer’; and ‘use my house,’ which includes downsizing and using reverse mortgages.”

    It seems “income” is far too often used in place of “net cash flow” by those believing they understand financial matters. Notice the first target area is “control spending.” While that will increase net cash flow in retirement, it will NOT increase income.

    Now look at what is said about reverse mortgages: “But it 1) allows you to stay in your house for the rest of your life; and 2) provides tax-free income.” We all know no reverse mortgage guarantees any senior that they will stay in the home the rest of their lives. But just as poor is the claim that any reverse mortgage “provides tax-free income.” Whether the proceeds provided are tax-free or not, cannot be determined until termination of the reverse mortgage.

    So called financial advice to seniors should be left to those with the competence to provide it. Senior advocates while very properly and forthrightly concerned about seniors and their finances rarely have the technical financial competence to provide real financial advice. This article only reinforces that opinion.

    Boston College can and should provide much better advice for those using their services. It is a poor reflection on their economics department, school of business, and faculty. No matter what is said in its defense, it is their name which gives credibility to this alleged project.

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