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*This is the Updated 2023 Edition Made Available in January 2023* Reverse mortgages are an important retirement planning tool. This book provides an up-to-date understanding about reverse mortgages and how to use them as part of a complete and responsible retirement plan.
I am a professor of retirement income. I may be the only author of a reverse mortgage book who does not work within the reverse mortgage industry. My focus is on finding ways to build strong retirement plans, and this is the perspective I bring to reverse mortgages.
I know that reverse mortgages can look expensive in isolation. But reverse mortgages should not be viewed that way. We need to focus on their overall contribution and interactions with other retirement assets as well.
Retirement is different from what people are accustomed to when working. Risks change. Retirees must sustain spending while not knowing how long their funds need to last, while managing the risks of a market downturn that can permanently derail a retirement portfolio, and while also being ready to manage unexpected spending surprises.
Reverse mortgages can help to manage these retirement risks by providing an additional resource to support spending and to coordinate with other investments assets.
My overarching interest is in building efficient retirement income plans to support the most spending potential for assets, both during life and as a legacy for the next generation. I demonstrate with case studies how reverse mortgages can contribute to better retirement outcomes in numerous ways:
- Coordinate between spending from the investment portfolio and from the reverse mortgage to better protect investments from market volatility
- Avoid the additional burden of fixed mortgage payments in retirement by refinancing a traditional mortgage with a reverse mortgage
- Pay for home renovations to help you comfortably age in place with the home you love
- Build a bridge to support getting the most lifetime value from Social Security benefits
- Use the reverse mortgage as a tax-free spending resource to better manage your taxable income
- Use the growing line of credit as a protective hedge for your home value or as a source of reserves to cover unexpected spending needs
This book provides the basics for how reverse mortgages work, why they work better when interest rates are low (unlike every other retirement tool), what their growing line of credit means, and how they help to manage investment volatility.
Reverse mortgages---when used correctly---can provide an added layer of security for retirees by creating flexibility for their assets. Opening a reverse mortgage earlier in retirement and using it in a thoughtful manner is generally more effective that treating it only as a last resort option.
Those who understand whether and how to fit a reverse mortgage into their retirement plan will have an important edge in achieving a financially secure retirement. This book shows you how.