For retirees with substantial investments in the stock market, February 24th and 25th was a scary ride. Monday the 24th marked the third-biggest daily point drop for the Dow Jones Industrial Average DJIA, +1.55% in its 124-year history, followed by another drop of 879 points marking it’s worst 2-day drop in history. For those living on their stock market returns, February was a reality check. The markets have grown steadily over the long term, but there will always be drops, followed by gains, over and over again. This crazy month may cause one to consider how to have safety and stability when invested in the market. Researchers Shaun Pfeiffer, C. Angus Schaal, and John Salter had a study published in the Journal of Financial planning that evidence how using a reverse mortgage in conjunction with your investments creates an estimated survival advantage of 30 years over not using one.
Living off your portfolio during a stagnant or dropping market is dangerous to your overall long-term financial health as it will cause you to deplete your principal investment quickly. When the market does rebound, it will take longer to regain the losses sustained versus someone that is not living on their returns. The aforementioned researchers have a proven solution, using an alternative fund to live on when the market is dropping or stagnant. A reverse mortgage allows you to take out a Line of Credit on your home that cannot be taken away; even if your home value were to lower (traditional LOC’s were frozen and taken away during the last housing drop). In fact, the money left in the RM LOC grows as it is left in the home (currently growth is around 5 ½ %). By getting a RM LOC today you can create a slush fund that is growing while you aren’t using it and money you can draw from when your investments are not sustaining your cost of living. With this strategy, you do not deplete your principal investment during downtimes, which enables you to recoup your market losses faster when there is a market rebound.
In February 2018, we saw the biggest drop in stock market history and in February 2020 we saw the biggest 2-day drop in history. Was this just a blip on the overall bull trend or was it an indication of future drops to come? No-one knows definitively, but by using a RM Line of Credit draw strategy, you will have growth during Bull markets and cash flow during Bear markets. Now is a great time to protect yourself and your investment returns with a Reverse Mortgage Line of Credit. To see what a reverse mortgage can do for you, visit our website at www.Funds4Seniors.com or call me to discuss this strategy. Robert Krepps, NMLS #255191, at HighTechLending Inc today to discuss how a reverse mortgage may be able to help you (877) 567 – 7476 or firstname.lastname@example.org .
HighTechLending Inc, NMLS # 7147, is an Equal Housing Lender. Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act.