Nowadays, more and more seniors are working past retirement age. Many seniors have no desire to retire and even plan on working for the rest of their lives. According to George H. Schofield, Ph.D. and Forbes contributor: “the notion of a traditional retirement (when you stop working and live off a pension or savings) is history”. If you share the same mindset as Schofield, you may be surprised to know that a reverse mortgage may still be valuable to you. To begin, let’s take a deeper look at why today’s seniors are continuing to work past the age of retirement
Why Seniors Are Not Retiring
There are many reasons why seniors are choosing not to retire. One of these reasons is because many seniors do not think they can afford to retire. Living has become a lot more expensive, so many seniors do not believe they can just live off pensions, Social Security, and their existing savings. Along with this, the life expectancy of today’s seniors is higher than any other generation before so even if you believe you have a lot of money set aside for retirement, it may not be enough. Because of this, many seniors are choosing to work in their retirement years. Whether you have a plan or not, it is important to know that there may be other financial options available to you during this new transition in your life.
How You Can Use a Reverse Mortgage
There is a common misconception that a reverse mortgage is only meant as a “last resort”, but this could not be farther from the truth. Reverse mortgages can be used in many ways – even for those who are still working and paying off an existing mortgage. One way you can use a reverse mortgage while still working is to help plan for the future. Life is full of surprises, so it’s helpful to make sure that you’re prepared if anything happens. By having a reverse mortgage, you may be able to be more financially prepared for any unexpected events that may come your way. Another way a reverse mortgage may be useful even though you are still working is by allowing you to build up your savings by using a reverse mortgage line of credit.
If the term is unfamiliar to you, a reverse mortgage line of credit is a pool of money derived from your home equity that you have open access to. You can access this money whenever you want and can use it however you like. As a flexible financial tool, this line of credit has additional benefits. One of the primary benefits of this option is growth over time; as long as funds in a line of credit remain unused, they will gradually accrue in value each month. Furthermore, choosing a reverse mortgage allows for payment flexibility – you have the option to make payments on your loan if and when you want. Additionally, this is a non-recourse loan, meaning that you will never owe more than the value of your home – no matter how large your reverse mortgage balance grows. The only requirements of a reverse mortgage line of credit is that you must continue to pay your property taxes, homeowners insurance, and home maintenance costs to avoid foreclosure. Lastly, there must be a minimum balance of $50 in your line of credit at all times to keep it open.
Ask Yourself These Questions
If you are unsure about getting a reverse mortgage, here are some questions you should ask yourself.
How are my finances?
– It is important that you look at where you are at financially. You need to be honest when it comes to how you are spending your money and if you can carry yourself through your retirement with these spending habits.
What do I want in the future?
– The next question you should ask yourself is where you want to see yourself during this time of transition. It is important to sit down with your family and make a list of goals you want to achieve together. By doing this, you can get a better idea of how much money you will spend during this time.
By asking these questions, you will gain a better understanding of your current financial situation and what steps you may need to take to get to where you want to be.
Whether you plan on retiring as soon as you can or working a little bit longer, it is important to know that there are other options available to you. By getting a reverse mortgage, you may be able to improve several aspects of your retirement.