Many Boomers Haven’t Saved Enough to Retire

Many Baby Boomers have not saved enough to live comfortably throughout retirement, especially if retirement could last 20 or 30 years. This is not breaking news…We have been hearing this familiar drum beat for years now.

However, as a recent Reuters article points out, many Boomers do have substantial home equity, especially now that housing values have started to recover after the massive crash that began in 2008.

This group of retirees is increasingly examining reverse mortgage pros and cons and finding that they can be viable way of extending retirement assets and lifestyle.

As the Reuters article points out,

Every day, 10,000 baby boomers turn 65, the traditional retirement age in the United States. And 48 percent of them report they are not on track to cover the basics in retirement, according to financial services company Fidelity. Sixty percent have less than $100,000 in retirement savings, estimates brokerage Charles Schwab Corp.

reverse mortgage benefitsIt is also prudent to note that if you consider taking out a reverse mortgage, you are still responsible for paying your property taxes, homeowner’s insurance, association dues, if any, and routine maintenance on your home. If you are not able to maintain these expenses going forward, it would not be advisable to get a reverse mortgage. It will be a wiser option for you to simply sell your home and move to a more affordable living situation long term.

A Reverse Mortgage Note of Caution

If you do take out a reverse mortgage and find yourself not able to afford the aforementioned expenses and maintenance, you will be putting yourself in danger of losing your home to foreclosure due to tax liens or other unpaid expenses.

A reverse mortgage can truly be a godsend for the right candidate, but admittedly, it is not a loan for everyone. Informed consideration is a must BEFORE you decide if this loan is right for you.

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