Retirement Spending is Just as Important as Retirement Saving
Long-term retirement planning continues to be a crucial topic for many seniors who are entering retirement presently or in the near future, especially because how we deal with the outstanding problems of retirement planning right now will also determine how we deal with them in the future, when younger generations start retiring as well.
According to an article by The Brookings Institution republished by Reverse Mortgage Daily, new research suggests that retirement spending is a big a problem as retirement saving. As important as saving is for long-term retirement planning (data shows a married couple hoping to retire would need to have saved approximately $250,000 during their working years to have a 90% chance of paying their medical bills), adjusting your lifestyle during retirement is just as important, especially on a fixed income.
The truth of the matter is, as the cost of living rises, and income stays the same, there are certain luxuries that must be foregone if retirement is to be successful. For example, a lavish car may be exchanged for a more modest vechicle. Or a big home may be exchanged for a smaller home or maybe a "dream home" in the right-sizing process.
Based on studies by Harold Evensky, utilizing the reverse mortgage as a way to strengthen a borrower's portfolio with a "Standby" Reverse Mortgage may help many seniors during retirement. Most importantly, when traditional retirement planning methods such as Social Security (which may not be as much as a retiree hoped) or stocks (which may have a bad week or month) a standby reverse mortgage may provide enough cushion to continue living the lifestyle a borrower(s) is accustomed to.
The main hurdle is education or lack thereof. Benjamin H. Harris states:
“Many retirees don’t have access to or knowledge of retirement financial products to provide security. While reverse mortgages showed signs of life through the Home Equity Conversion Mortgage program, which originated 400,000 reverse mortgages between the inception of the program in 1989 and 2007, the market remains plagued by reports of improper lending behavior and misunderstanding among borrowers.”
If anything, the retirement puzzle has just gotten a little bigger and the pieces have gotten a little smaller. That does not mean it's impossible to solve it but new methods of retirement planning need to be employed, analyzed, considered before being chucked in the "not interested" heap.
If spending is just as important as spending and lifestyle changes are are given during retirement then why not consider a program that has continually changed for the benefits of borrowers in the past few years.
The time to be wary of the reverse mortgage because of the mistakes of the past is over and the time to educate on the new reverse mortgage is upon us.
Interested in a reverse mortgage or simply want more information? Give PS Financial Services a call at (888) 845-6630 or via email at info@reversemortgage.com. We don't pressure those who inquire. We are simply here to help.
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