A new article at U.S. News and World Report giving recommendations on strengthening retirement security offers reverse mortgages as one of the potential tools a senior can use to bolster their financial security in retirement.
Among the recommendations from U.S. News contributor Craig Stephens, downsizing a home is included and offers ways for a senior to either age in place, or tap home equity as a way to increase retirement security.
“Housing is a substantial cost for most retirees,” Stephens writes. “If your current home is paid off and it serves your long-term needs, staying there may be your best option. However, moving can also increase your retirement security in some cases. A home that is too large for your needs will require higher maintenance and utility costs and keep your taxes high, and you may determine those costs are not the best use of your retirement savings.”
If a senior is house-rich, the necessity could arise to cash that equity out in order to cover living expenses.
“You could take out a home equity loan or reverse mortgage, or sell the home to unlock the equity and buy a less expensive and more suitable residence with the proceeds or rent,” he writes.
Taking advantage of tax savings on retirement accounts is also recommended as quickly as possible, as is attempting to go into retirement without any debt obligations such as a mortgage payment. The establishment of retirement income in the form of rental real estate, as well as the counsel of a fee-only fiduciary advisor to evaluate the options available to minimize the likelihood of making a mistake are also offered as recommendations.
Other tips include the regular rebalancing of an investment portfolio, the reduction of asset risks in order to avoid the volatility of the stock market as a senior advances in age, and the move to more reliable fixed income sources if possible.
For the full list of tips and the reasons behind them, read the full article at U.S. News & World Report.