Yahoo Finance: Reverse Mortgage Can Assist Generate Regular Money Stream in Retirement
A reverse mortgage can be a viable option for retirees to consider whether they want to generate sufficient cash flow to meet their needs and support their retirement lifestyle and should be considered among other options related to social security benefits. This emerges from a new informational video released on Yahoo Finance.
“When you think about retirement, you are probably wondering how you can generate a steady stream of income after that time,” says video host Natasha Abellard. “Because we all know your expenses won’t go away just because you stop working. Nerdwallet suggests several ways to create a stream of income during your retirement years. “
The first recommendation revolves around a concept that has long been advocated by pension professionals: postponing social security benefits until later life.
“You should maximize your checks by delaying the start of your payouts,” Abellard says. “While you can benefit from social security at the age of 62, it is better to wait until 70, as the benefits will then be exhausted.”
However, if social security didn’t cover livelihoods even at higher levels, an option like a reverse mortgage should be considered, she says.
“A reverse mortgage is a loan that puts some of your equity in a monthly check,” Abellard says. “And while it may be tempting to put your money in safe investments like bonds, certificates of deposit, or savings, this is not the best option in the long run. About half of your portfolio should be invested in stocks, which can generate more income over time. The balance also recommends systematic withdrawals from a balanced portfolio to meet your income needs. “
Of course, a monthly check is only one such option available to a reverse mortgage borrower. Other payout options – including fixed or floating rate, lump-sum payout, line of credit, term annuity, annuity or any other combination of payment options, and determining when and how quickly the funds can be withdrawn – were not addressed in the video.
However, presenting a reverse mortgage option alongside such a frequently cited retirement tactic as delaying social security payments can be a welcome event for those trying to showcase the potential benefits of a reverse mortgage loan to senior borrowers.
Check out the video on Yahoo Finance.