Helping a client live may be a critical part of retirement planning, but when that individual wants to age in place then a reverse mortgage can be a viable solution, reports Investment News in a recent article featuring input from various financial advisors.
“With the majority of aging clients seeking to remain in their homes, reverse mortgages are increasingly being seen as a way to turn these housing assets into income,” the article states.
While the article acknowledges that reverses mortgages historically carried the perception as loans of last resort, it notes changes from the Department of Housing and Urban Development over the past few years to “improve the safety of these loans,” including the requirement of a financial assessment.
“Reverse mortgages are inherently interesting because they give you access to cash, and they are extremely flexible about how the cash can be used in a way that will serve you well over the rest of your life,” said Tom Davison, a certified financial planner and special projects coordinator for Columbus, Ohio-based Summit Financial Strategies, in the article.
Investment News also mentions that funds from a reverse mortgage during the early years of retirement can “dramatically cut down” withdrawals from investment portfolios or allow borrowers to build higher future Social Security payments by delaying benefits claiming until age 70.
Read the Investment News article.
Written by Jason Oliva