These Are Your Golden Years: Get Creative with Your Investments

Once you’ve put a lifetime of work into building your retirement, it’s time to relax. You’ve put in the hours, cut the expenses and made the sacrifices that needed to be made. You deserve the nest egg you’ve built.

But just because you’re looking to slow down doesn’t mean your cash flow needs to do the same. There are ways you can leverage the financial success you’ve had to this point into a safe, simple and successful investment opportunity. The best way to do this is with a reverse mortgage.

Curious how a reverse mortgage could benefit your specific financial situation? Read below to learn more.

The Benefit of Reverse Mortgages

One of the best reasons to choose a reverse mortgage as part of your retirement plan is to delay using your other retirement accounts. While you use a reverse mortgage for your everyday expenses, your IRAs and 401ks will likely appreciate more over time.

Reverse mortgage specialist with Finance of America Reverse Scott Zmikly said reverse mortgages are a great safety net for future or current retirees.

“It’s just another way to supplement [your retirement income],” he said.

Zmikly used an example he saw in the media of two retirees who both have $500,000 in assets on top of a paid-for home. While one used a reverse mortgage to live off, the other drew down his assets before passing away.

Because the first example used a reverse mortgage, he was able to let his assets continue to grow and mature over the years. His children were left with significantly more money than the retiree who didn’t use a reverse mortgage.

Ignoring the Stigma

Until a few years ago, reverse mortgages had the stigma of being an untrustworthy investment option, in the same vein as pyramid schemes or whole life insurance policies. But recent regulation has made them as safe as an IRA, 401k or any other legitimate retirement vehicle.

Zmikly says that, in his opinion, there are no downsides to a reverse mortgage.

“They are the safest programs on the planet now,” Zmikly said. “I’ve done every mortgage you can think of over the past 12 years, and all I do now is [reverse mortgages] because of how beneficial they are.”

To be eligible for a reverse mortgage, you must be at least 62 and older. There is one primary borrower on the account and a co-borrower. If the other spouse is not 62, they will be considered the nonborrowing spouse.

Those who have taken out a reverse mortgage have to continue making property tax payments. They also have to pay hazard insurance and other property charges.

One reason that seniors have hesitated to use reverse mortgages in the past is they want to leave the property in question to their children. But Zmikly said he doesn’t consider this a drawback. If you use a reverse mortgage to live off of, your children will likely inherit money from your retirement accounts, which is easier to access than a house.

“You’re going to leave them one or the other,” he said. “Why not leave them more of untouched assets?”

Overall, a reverse mortgage should be considered by anyone who qualifies and can benefit from more money in retirement. If you’re interested in learning more about how a reverse mortgage can benefit your retirement plans, go here to learn more about how a reverse mortgage can help you.

This article is intended for general informational and educational purposes only, and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.