For seniors over the age of 62, some feel their retirement has snuck up on them. Perhaps the massive decline of the stock market in 2008 hampered a retirement account. In instances like this, using a reverse mortgage as a retirement tool may be a necessary approach.
Many have resorted of using their retirement savings principal to pay montly bills such as their mortgage. If on a fixed-income, this can be a disastrous scenario. As each and every month, your retirment account is further and further depleted. If this is the case you should look into putting a stop to the madness.
How a Reverse Mortgage Can Assist in Retirement
By moving forward with a reverse mortgage, you will eliminate your mortgage payment. You will also receive a lump sum of cash, installment payments, or a line of credit. This instantly solves the problem of using your retirement savings (specifically your principal). This will lengthen the use of your savings. Hopefully, you have a financial advisor or method of allowing your retirement account to safely accumulate interest.
If so, you can use the proceeds from the reverse mortgage to further fund this retirement account and/or safe investment. Allowing your money to earn you money is critical. Using principal is not recommended as it is typically not infinite in nature.
So in addition to your fixed-income, the proceeds from the reverse mortgage (now hopefully in an interest bearing account of some sort), and the lack of a mortgage payment should put you on the road to not worrying about your financial situation. By doing the recommendations above, you will quickly notice a difference in the disposable monthly income along with helping stop the depletion of your retirement account.
It is my goal this post has helped you realize the importance of a reverse mortgage as a retirement tool.