Reverse Mortgages Could Ease No. 1 Retirement Worry

Educating people about reverse mortgages could help alleviate their most pressing concerns about income during retirement, suggest recently released survey findings from the Teachers Insurance and Annuity Association-College Retirement Equities Fund (TIAA-CREF).

Nearly 85% of respondents said that having a guaranteed monthly income stream is their top priority for retirement planning. But few people know about the options for achieving this—for example, of the 1,000 people who took the survey, 65% said they are not familiar with annuities.

While the findings do not address reverse mortgages specifically, the results suggest that many people will be in a position to benefit from this source of cash flow. Not only are few people educated about annuities, but an increasing number are not saving anything for retirement. Last year, 21% of respondents said they are not saving, compared with 29% this year.

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“The results … reveal the critical need for education and financial advice to help Americans who are clear about what they want from their retirement plan, but unclear about how to achieve it,” the survey report concluded.

Click here to access the complete findings.

Written by Tim Mullaney

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  • Neither the article nor its link provide much insight into the importance of the use of reverse mortgages during retirement. If anything when taken together they only add to the confusion about reverse mortgages.

    The link is to an executive summary of a survey. The summary provides no information about the survey including the questions used, the population, the sample size, the basis for the size selected, and even worse the level of confidence those writing its conclusion and findings had in the survey and in those findings.

    The author of the article above makes the assertion that a reverse mortgage is not debt but a source of income when he says: “While the findings do not address reverse mortgages specifically, the results suggest that many people will be in a position to benefit from this source of income.” Confusing debt for a source of income is a mistake our industry can ill afford.

    The quotation is also interesting in that the author asserts “…the results suggest that many people will be in a position to benefit from this source of income.” There is nothing at the link that gives any information about the value of the homes owned by those surveyed which are used as their principal residences and the amount of debt owed against them. There is not so much as a simple statement about the home equity of those surveyed. So where is it that the summary “suggests” anything about how “…many people will be in a position to benefit from…” reverse mortgages?

    While there were some deep seeded problems with this article, I hope to see articles which I can support from this author in the future.

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