In today’s modern world of social media, with all the posts and tweets of everything you could possibly imagine, ask yourself, when was the last time you’ve seen a picture of a mortgage burning? For those of us that are old enough to remember mortgage-burning parties, it was a big deal! There was no joy like that last mortgage payment and our parents prided themselves on it.
These days an alarming amount of Americans are carrying that debt into retirement. The Consumer Financial Protection Bureau has reported a 30% increase since the year 2000 for mortgage holders in their 60’s, and for those age 75 and older, that percentage is up by approximately 9%. It’s not just carrying this debt into retirement that is alarming, it’s also the amount of debt. The national median mortgage debt for seniors increased by 82%, from $43,400 to 79,000. The CFPB stated in their 2016 report that rising mortgage debt is “threatening the retirement security of millions of older Americans”.
Most all retirement planners agree that carrying debt into retirement is a dangerous move. Reverse mortgages have become a popular piece to long term retirement planning. It allows homeowners to use a portion of their homes value to eliminate debt. Since a reverse mortgage is the only loan that does not require a monthly payment, it puts that money you have been sending to your mortgage company, back in your pocket each month, creating the positive cash-flow that is essential for retirees. If you would like to learn how a reverse mortgage could defuse that retirement time bomb give me a call. Be sure to burn that last mortgage statement and post it on your social media page.