Not everyone approaches retirement planning the same, but for those who may be curious about some things they can do to potentially strengthen their financial situation in their early sixties, one of these The way forward that is “proven” is to gain access to their home equity by employing a home equity conversion program. Mortgage (HECM).
This is a view shared by financial planner Robert Klein in a new column published by The Street. In addition to other potentially more common strategies, including delaying taking Social Security benefits; take steps to reduce certain health insurance premiums; and a Roth IRA step-by-step conversion strategy – a reverse mortgage may be able to provide additional cash before retirement if someone plans to end their day job before age 65.
“[H]Wealth, even though it represents about half of an average household’s equity, is often overlooked as a retirement income planning tool, ”Klein explains. “There are many strategies that can be used to provide readily available tax-free cash to pay for planned and unexpected expenses throughout retirement by monetizing a portion of your home’s equity. “
Many of these strategies can be used in conjunction with an HECM, Klein explains, a key product feature playing a role in the potential conversation surrounding such a strategy.
“All homeowners age 62 or older with or without a mortgage should assess a potential HECM for its ability to provide unlimited access to a growing tax-free line of credit without the drawbacks of a home equity line of credit, or HELOC.” Klein writes. “When implemented early and used strategically to unlock illiquid home equity, a HECM reverse mortgage can be used to increase after-tax cash flow at opportune times throughout the life cycle. retirement while providing peace of mind. “
Klein, who was a recent guest on The RMD Podcast, discussed potential advice points for reverse mortgage professionals looking for a financial planner as a go-to partner.
“You just have to reach out,” he said on RMD # 24. “I’ve reached out to people in the reverse mortgage industry, various people I’ve researched, and industry experts. I have had mutually beneficial relationships with these people and have learned a great deal about [the product]. So I think it’s about reaching out to people you see who are interested in the business, preferably. And then, just open the eyes of other advisors who might not be so obvious as to their interest in the reverse mortgage industry.
Read the column for The Street.