For the growing number of aging Americans who have no retirement savings, tapping into home equity and taking out a reverse mortgage could be the most effective way to fund retirement, according to a recent Forbes article.
This article joins dozens of others that have recently touted the benefits of using a reverse mortgage to solve the retirement planning puzzle.
From local reports which advise when a reverse mortgage makes sense, to a Q&A with a personal finance columnist who says reverse mortgages are now considered a wealth management tool, media reports are buzzing around the topic.
In the recent Forbes article, writer Nick Clements notes one of the greatest challenges facing retirees: generating sufficient income for everyday living expenses, particularly in today’s low interest-rate environment.
That challenge, coupled with Americans’ overall lack of retirement savings, “makes reverse mortgages so appealing to so many people,” Clements writes.
However, there are some drawbacks to using a reverse mortgage, including costs and ongoing fees, which should be fully researched before taking out the loan. Clements also suggests homeowners consider selling their home and downsizing to free up some cash.
“Here’s the bottom line: Years of hard work created your home equity and you should make the most of that money during your retirement,” he writes.
To read the full Forbes article, click here.
Written by Emily Study
