Reverse Mortgage article follow up question
Hi Terry..
Read your article last Sunday in Tribune on Reverse Mortgage..
recently, our Financial Planner reviewed with my wife and I an alternative idea I had not (and still) don’t fully understand.
-we own our home 100% and we are retired (age 64 and 66)
-Home value approx. $600K
– We don’t need the money right now, as we draw down our IRA toward taking social security at around 69.
— We do not have Long Term Care Insurance.
** His proposal is to take out a reverse mortgage for approx. $220K, and after fees about $198K
let interest accrue, and build that nest egg into the $500-600K level. It becomes an “insurance policy” if my wife or I have to go into a nursing home, etc. when we are in our 80’s or later. If we don’t use it…. we don’t get the new nest egg amount (i believe) and we are just out the original fees associated with taking out the reverse mortgage.. Sounds like an insurance policy for Long Term Health care, but not sure what else, or what else we can use it for..???
sorry for the long winded question, and thank you for what you do for us consumers
Mike Z.
Terry Says
I’m not sure your advisor has your best interests at heart.
First of all, I have no idea what savings you have for retirement in your IRA — but I’m guessing that you retired too soon.
Second, your advisor should have figured out how you’d live from now until AGE 70 — each of you — to maximize your Social Security benefits — not “around 69”! (Go to www.MaximizeMySocialSecurity.com and pay the $39 fee and see the best strategy –all facts, no guesswork.)
Third, is this advisor “selling” RMs? His strategy is “too cute” by far! There is NO WAY you’ll come out ahead with this deal. He just wants your MONEY to invest and build his “assets under management.” The fees are substantial, and absolutely no reason to lock your house into this deal.
So my best advice to you is: FIND A NEW ADVISOR!!! Someone who will put your interests first!
Please use this link on my website (I get NOTHING out of this recommendation) to find a FEE-ONLY FIDUCIARY advisor who can look at your entire retirement picture. And run as fast as you can away from your current “advisor”!!!
