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Have you planned sufficiently for retirement?

We all know the time for retirement will arrive someday and we may feel that day is so far off…until we realize that day is right around the corner.  With the demands of work, marriage, kids, the surprises of life and having fun, preparing for retirement can be put on the back burner while we take care of more important things.   Life goes faster and faster, and we get busier, by the time we start preparing, we may be far behind of where we need to be.  HSBC surveyed over 141,000 people and found the main reasons people have cited for not being prepared for retirement:

  • 51% cite Paying off credit card and other debt
  • 25% cite Paying off mortgage debt
  • 8% cite saving for child’s education
  • 6% cite saving for vacation
  • 76% cite unforeseen major life events such as illness, divorce, or losing a spouse

Regardless of the reason, if retirement is upon you and your savings and preparation are not what you had hoped, you have options for improving your financial picture.  Putting in overtime hours and adding that to your retirement savings can make a big impact.  You may want to take a hard look at your finances and see what expenses you can reduce and which expenses you can cut out altogether.  Cutting out your $5 morning latte could actually save you $1,300 a year.  What could your investments do with an extra $1,300 a year?  Over a 40 year period?  You may use any savings to pay down or refinance any high interest credit card debt first.  As you go through life, your investment strategies need to adjust accordingly and you need a great financial adviser to guide you through all of it.  Make sure your adviser takes a look at your ‘big picture’ and not just a few of your investments.  This will help you to feel comfortable that your nest egg is fully maximizing its potential.

In 1992, only 19% of households 65 and older carried mortgage debt into retirement, compared to 40% of households in the same age group in 2010.  Carrying mortgage into your retirement is like trying to swim with weights tied around your ankles; where some may be able to keep their heads above water, others may not be so lucky.  If you are nearing retirement, or you are already retired, a great option to eliminate your mortgage payments is to get a reverse mortgage.  Even if you only qualify for enough to pay off the mortgage, that is great!   If you have a smaller mortgage, or no mortgage at all, a reverse mortgage can provide you money that can be invested in rental homes, with your financial adviser to maximize your profits, you may want to leave the money in a Reverse Mortgage line of credit that currently grows around 4 ½% a year, or you may elect to take a guaranteed monthly payout for life.  You can take a look at what a reverse mortgage would do for you here.  Regardless of where you are at in saving for retirement, sacrificing and saving earlier makes all the difference in the world, but, if you are a bit farther along, a reverse mortgage may be just the solution for you.

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