My husband and I are 72 and 73. We have our Northern home paid for, but have an $80,000 mortgage on a second home in Florida. We have money saved with half invested in a Vanguard mutual fund…index and some
bond funds. I know the market is iffy, but I remember you saying keep stocks from November to April. Still true?
We are thinking of getting a reverse mortgage from Security 1 Lending as a backup, which we won’t use unless we absolutely have to. We would keep it as a line of credit plus they say we would get interest on the money. Can you advise us? Thanks.

Terry Says:  First, let me clarify.  I said that HISTORICALLY speaking that six-month period is best for stocks.   You should contact Vanguard, and given that you have more than $50,000 there, they will help you allocate your investments appropriately —  including a plan for your required minimum withdrawals, assuming that this is IRA money.

The issue of a Reverse Mortgage is completely separate.  Have you done a plan with a Certified Financial Planner  to see whether your income can support both homes?  It’s time to face facts.  At some point, you may need to sell one of the houses and change your residence.  That’s not guesswork, it’s called planning.  Remember, the amount of the credit line you get with a RM depends on your age.  The longer you wait, the more you can get.  And why pay fees now, when you don’t really need the money?  I think a RM is a great “ace in the hole” if you live longer than planned, or well into your 80s, and still want to stay in the home you have.  That’s when you tap your home equity via a Reverse Mortgage.

(I have said this many times:  I am a big fan of Reverse Mortgages, done at the right time and for the right reason.  My own father is approaching his 95th birthday as I write, has had a RM for about 15 years, and is surely beating the lenders at their game!  It’s working big-time for him, and he enjoys the view of the ocean from his Florida condo!)