Boomers are retiring in droves, in fact about 10,000 a day! Watch out World, this generation wants more than bingo and shuffleboard, and will shun anything associated with growing older. John Lennon’s song “Revolution” fits perfectly with how baby boomers are treating their golden years by saying “got a real solution”.
I am part of this generation and we have redefined each stage of life as we have passed through it. We will also retire in a way that is distinct from our parents. Yet few of us will enjoy the generous pensions and retiree health benefits enjoyed by many of the prior generations. The fact is that most boomers are inadequately prepared financially for retirement. Does this mean a retirement crisis is at hand? When we examine net worth figures, we find that the single largest asset for most boomers is their home. Home equity will most certainly be needed to fund long term retirement planning.
One of the most important planning strategies that retirees can have is the elimination of debt. Almost all financial planners agree that carrying debt into retirement is a very dangerous move, one that can imperil your financial future and drain your retirement savings. Since Many Boomers are facing tough chooses; retiring with a mortgage payment, continuing to work, or downsizing into a smaller home. Let’s look at the plan for “the real solution” I’m sure you would “love to see the plan”.
Here are a couple examples of how Boomers are utilizing home equity with a reverse mortgage to enhance and assist their retirement goals:
- The average mortgage payment represents 25-35% of annual income. By replacing your current mortgage with a reverse mortgage you have achieved 2 things. First you have eliminated that monthly payment without creating another debt. Secondly you have secured your retirement home. Your only obligations are to live there, pay the property taxes and homeowners insurance.
- Using a portion of the tax free proceeds From a reverse mortgage to delay Social Security benefits and let investments Grow.
Our generation in likely to live longer, stay healthier, and lead more active lives than any retirees have before.