TIME recently featured a segment with renowned author and personal finance columnist, Jane Bryant Quinn, where she discusses how her perspective has changed on reverse mortgages and why it can be a good option, even if you aren’t running out of retirement income.
As many in the industry are aware, recent changes have put new rules in place for reverse mortgages—changes that Quinn admits really pushed her to give reverse mortgages another look.
Formerly, people would take their reverse mortgage in a lump sum, then would run out of money and wouldn’t be able to pay their insurance or taxes, she explains.
“Now congress changed the rules, basically they take the money out for you and they only give you a certain amount per month that they are sure will last for life,” Quinn says. “This change has very much reduced the risk for older people with very little money.”
For people on the younger side, she explains that it can be very helpful if you take a credit line instead of a lump sum if you qualify for a reverse mortgage. This way, people could make interest on it for each year they don’t use it.
“Then if you’re taking money out of your savings or investments and the market is down and you want to sell investments, you can take money to pay your expenses out of your home equity credit line,” she says.
Quinn talks more in-depth about how her views on reverse mortgages have changed in her latest book, How to Make Your Money Last: The Indispensable Retirement Guide.
See the full video on TIME.com here.
Written by Alana Stramowski
