reverse mortgage: How to Trade-Up (or Down) Using a Reverse Mortgage
- 05/28/19 10:37 AM
Home prices in many markets have gone up recently. This is leaving many retirees with sticker shock when it comes to trading up, or even trading down. Consider Anna and Olaf who are in the process of selling their $400,000 home. They’ll be left with net proceeds of approx. $364,000 after paying 9% in sales expenses (transfer taxes, real estate commissions, etc.). The new house they want to purchase costs $500,000, leaving them $136,000 short. Option 1: sell or liquidate $136,000 worth of investments or retirement assets. They will need to “gross-up” the withdrawal to account for taxes if the funds … (1 comments)
The Rule of 25 – How much “critical capital” do I need? According to this formula, if you multiply the annual income you need by 25, that’s approx. how much money you need to save in order to retire. This would allow you to live off your retirement assets without dipping into principal. This assumes your after-tax rate of return during retirement is 4%. For example, if I want to generate $60,000 per year in after-tax retirement income, I would need to save a … (3 comments)
reverse mortgage: Timing is Everything… Especially During Retirement
- 04/16/18 06:17 AM
A lot of discussion about “sequencing of distributions” has been taking place recently in financial planning circles. “Sequencing of Distributions” looks at the order in which you take distributions from your retirement account. This matters because the order in which you take distributions has a very significant impact on how long your retirement assets will last. Consider the two examples illustrated in the chart. Column 1 has the same amount of distributions scheduled for the next five years, regardless of how the market performs. Column 2 changes the distributions in years 2, 3 and 4, based on the performance of the market.
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