Ask Terry Questions Reverse mortgage or how to pay down debt

Reverse mortgage or how to pay down debt

By Terry Savage on March 12, 2024 | Financial Planning / Retirement

I’m 64 years old. Divorced for 5 years after 35 years of marriage. I work part time and earn approximately $30k per year. I own my home and it’s worth approximately 550,000 to 600,000. I have funds with a financial advisor.
I have not taken social security yet. I’m looking to get more income per month. I have approximately $18,000 debt on credit card.
Would I qualify for a reverse mortgage and what happens if I decide to sell or pass away for my children to deal with?

Terry Says

It’s too early — you’re too young — to take out a Reverse Mortgage now.
If you have funds with a financial advisor, I suggest you call him/her immediately and tell them to liquidate $20,000 worth of investments and send you a check. (That’s assuming it’s not in a retirement account.) Then pay off the credit card balance. That will free up cash every month –and let you sleep well.

Next step is to carefully think about WHERE you want to be living 10 years from now. Still in this house? Or is it time to sell, put the money in the bank — and perhaps move into an apartment or senior community? It’s tough to downsize, but your home equity could give you a safety cushion.

Please don’t take Social Security until your full retirement age — about 67. It will give you a larger check that’s worth waiting for.

You don’t say how much money you have with your financial advisor, or whether most or all of it is in tax-sheltered retirement accounts. Or how much you are paying in fees. But if you are concerned, read this article to find someone to review your situation just for a fee — someone who is not trying to sell you anything!

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