“It’s critical that pre-retirees change their current mentality of planning to live 20 years in retirement,” said John Carter, president and chief operating officer of retirement plans for Nationwide Financial in a recent article published in the Reverse Mortgage Daily. “Too often, once retired they realize they’re facing 10 or more years of expenses ahead of them that they didn’t pay for.”
The cost of retirement has risen and many seniors haven't realized it. In fact, many Americans underestimate Long-Term Care (LTC) by more than three times the actual cost, and nursing homes carry an estimated to cost at least 265,000 per year by the time the last boomer retires (2030).
With the cost of living rising daily in an uncertain housing market and the fear of outliving your retirement income an ever-present elephant in the room, the Home Equity Conversion Mortgage, or reverse mortgage is an available option for those looking for a smooth and solid retirement.
While many have found solice in retiring later working part time, Harold Evensky, "the financial planning guru," recently published a paper in Journal of Financial Planning advocating the benefits of a "standby" reverse mortgage, a second option for those seeking the benefits of a reverse mortgage with lower, upfront closing costs.
The benefits of a standard reverse mortgage are great, regardless, helping seniors achieve financial security in a time of uncertainity. The HECM saver, however, is an alternative, providing homeowners 62 years of age and older with a second reverse mortgage option that provides an uncancellable line of credit that is guaraanted to grow--based on current variable rate--can never be frozen and can never be reduced as well as borrower control over when, and if, the line of credit is used and ability to repay the loan at any time without penalities.
It's time to consider what is at stake: financial security in a time where working might no longer be an option and unexpected costs may drain your life savings. The HECM Saver may be a helpful option in case it is needed providing peace of mind in a troubled financial climate. After all, retirement used to be about settling down and relaxing, make sure it is again.