Retiring with the help of a reverse mortgage

When thinking about retirement, most people have one question on their minds: “Do I have enough money to fund my retirement?”

It’s a simple question with a varied and often complex answer. Perhaps you have a million dollars in various retirement accounts and other investments, but how do you know if it is enough? And if it isn’t, what do you do then?

If you have determined that today you need $5,000 a month to live comfortably, you need to determine how much you will need when you retire so you are able to keep up your current lifestyle.

Remember when a candy bar cost a quarter? What can you get for a quarter today? How far will today’s $5,000 a month carry you, twenty years from now? Your financial planner will use a calculation based on what you currently have for retirement, the rate of inflation, and the historical return on investments. The number he comes up with will be what you need to fund your retirement for your expected lifespan.

Should you come up short, your advisor will be able to come up with an approximate dollar figure you will need in order to make up for that shortfall. That figure will be based your ability to add new funds to your retirement, the rate of return on existent funds, and the number of working years you have left before you need to begin using those funds.

For many people, increasing the amount they can contribute to retirement isn’t an option, so they need another option. In Austin, a reverse mortgage is one solution to the problem.

Unlike the standard mortgage products, a reverse mortgage is easy to qualify for, as long as you meet the two basic requirements of minimum age and equity. Before you spend any time and money going the reverse mortgage route, make sure you qualify.

You must be at least 62 years old and must have a minimum of 50 percent equity in your home.

A reverse mortgage can give you the income you need to make up for a shortfall. You can never be “upside down” in your mortgage regardless of the value. One of the nice things about a reverse mortgage is that there are no income or credit minimums. Upon the death of the homeowners, the house goes to the estate.