Reverse Mortgage and Your Investments

Even though you have been responsible during your working years, and have been a prudent investor, your current investments may not last as long as you had anticipated.  As an investor, you have experienced many ups and downs in the market.  Not always, but sometimes a reverse mortgage may provide a means of extending the life of your investments.  In the last ten years, the S&P index has returned approximately 104%.  With dividends reinvested the total return is close to 152%.  If you figure in the “CPI” the total return (dividends reinvested) is almost 118%.  Think about it.  If a reverse mortgage can give you an option of when you withdraw form your investments, it may enable you to withdraw when the market is performing and ride it out when the market slumps.

Take the scenario where a retired couple finds themselves faced with a large unforeseen expense.  Yes, they have investments to cover this financial burden, but at what cost?  Selling some of their stocks can raise the cash needed, but there are costs involved.  The selling of the stocks may trigger a tax liability, that come tax time, may be another expense that puts a strain on their financial well-being.  The reverse mortgage may be the tool that helps the couple navigate the financial “bumps” that often strain an otherwise smooth retirement.  It is always a good idea to consult a qualified financial advisor when make such decisions.

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