![]() ![]() Have an open mind, and when you talk to one of our reverse mortgage planners, just set your emotions aside for a second. The bottom line is when we look at the emotions that surround reverse mortgages and what has been published and supported by independent studies, you will find the benefits of reverse mortgages overwhelmingly more significant than the risks or the costs. They only wish they would have gotten it earlier. In my personal experience with 1,000+ borrowers over the last decade or so, not one of them has been unhappy with their reverse mortgage. Let’s talk about the people who already have reverse mortgages – those are the people that are the most satisfied. Of course, the reason that happened is that they used less of their investment accounts and more of their home equity. The last thing was perhaps the most surprising and the most interesting. People with a reverse mortgage ended up with a higher net worth, not a lower net worth, when they took reverse mortgage money at the beginning of retirement, rather than at the end. Most importantly, their portfolio longevity – the length of time that people’s money lasted – went up because they were able to use more money from their house before depleting all the wealth from their retirement accounts. Along with that situation, with the increased cash flow, the taxes paid on their income tax returns usually went down, and they did not spend as much in taxes because of the strategic withdrawals that they made with IRAs*. They had more money in retirement to enjoy retirement the way they expected to. The first thing is that their cash flow increased. When their home was tapped into the situation, at age 62, there was some income taken out of the house, three important things happened. The three buckets of wealth are their income and nest egg, their retirement money, and their home. Understanding the Line of Credit Growth for a Reverse Mortgage, by Wade D. Sources: Standby Reverse Mortgages A Risk Management Tool for Retirement by John Salter, Ph.D., CFP ®, AIFA ® Shaun Pfeiffer and Harold Evensky, CFP ®, AIF ® The 6.0 Percent Rule, by Gerald C Wager, Ph.D. And they did this by looking at it logically*. At age 62, not 82, not 92, but right at the beginning. The bottom line is that all of the studies done at these colleges, and by many of these brilliant people that have no vested interest in the reverse mortgage product, have found that the best time to get a reverse mortgage is very early in retirement. There has been lots of research by PhDs, and MBAs in universities that have done extensive studies such as Texas Tech University. But the fact is that logic, research, and facts tell a very different story. ![]() When the piggy bank is broken, and the last garage sale is done, that is when we should get a reverse mortgage. They are something to be used at the end when people are broke when they have no choice. So most people conclude that reverse mortgages are something to be avoided at all costs. ![]() These all typify that reverse mortgage loans are something to stay away from and avoid. They are bad they cause people to lose their homes to foreclosure. They’re something that preys on the elderly. People come up with all kinds of nasty words about them. I’ve never seen a situation that has evoked more emotion than a reverse mortgage loan. Two plus two always equals four, yet emotion comes into play in almost every financial decision. ![]() The interesting thing is that when people make financial decisions, they often make them emotionally even though numbers are very logical. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |