| Techniques and Strategies that enjoy higher success rate when used with Reverse Mortgages. |
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Reverse Mortgages can be used as a technique allowing a young senior to delay receiving Social Security benefits allowing that income to be more meaningful in the future, since each year you delay starting them will make what you receive higher. This is not a reason on its own to take out a Reverse Mortgage but I feel it could be added to a long list of indirect advantages and benefits of the program.
Reverse Mortgages are often used as part of strategy to avoid needing to spend down investments during bear markets to preserve these liquid assets such as IRA's, 401(K)'s, NQ'd brokerage accounts (meaning your "non-IRA" or Non Qualified Stock and Bond holdings) and of course precious bank savings accounts. This allows these other assets to hopefully grow and increase your overall holdings.
Since today's Reverse Mortgages allow seniors to still hold the title (own their home) they receive the benefit of (and enjoy) all future appreciation of the property. This is especially valuable in a period of recovery of real estate values, like we seem to have been in for a while now. So this is the third Technique or Strategy, which is to hold your home longer for the value to come up before selling it. These three Techniques or Strategy all help to preserve future home equity values, and other capital accounts, have higher income for longer, which will both enhance the quality of one's life and benefit one's heirs. If that is your objective. Ironically, for those who have them, (heirs that is), if I can "reverse" your thinking, you may see how their future overall financial situation is likely to actually be enhanced or better than it otherwise would have been in reality, even though the equity in their parents home was reduced.
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| Expanded Reverse Mortgage Planning Strategies |
Increase your ability to provide financial security to your surviving spouse without paying premiums on life insurance.
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In Life Insurance programming, for couples, in the process called “Capital Need Analysis” the first thing we allocate the use of current assets and life insurance proceeds for is to payoff the mortgage, this extinguishes the monthly mortgage payment. This is a starting point in the process for creating financial security of the surviving spouse regardless of their age. This is because we do our best to use the “Capital Retention” principal to produce income, and it take more capital to produce a monthly income equal to the mortgage payment than to simply pay if off in full. Again, so when the mortgage is paid off the monthly payment is extinguished from the budget. Then the monthly income needing to be generated from capital is far less, so it takes far less capital, so it takes far less life insurance, so it takes far less premiums, if any. I have installed over a thousand life insurance policies which have been installed to support this concept so I am no stranger to it. I am looking forward to sharing how that relates to the benefits of Reverse Mortgages, but in a nutshell, for this subject, it is like this. When you close on your Reverse Mortgage, if you have a normal forward mortgage now, then that monthly mortgage payment will be extinguished from your current budget, so then the monthly income needing to be generated from capital (to meet the monthly needs of the surviving spouse) is far less, so it takes far less capital, so it take far less life insurance so it should take less retirement income to provide the benefit of mutual financial security, since the premiums are not required for this specific purpose.
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