Reverse Mortgages No Longer "Wild West" of Financial Planning

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Real Estate Agent with F.C.TuckerEmge Realtors, LLC

Until recently, reverse mortgages were considered the “Wild West” of retirement planning, writes a Wall Street Journal article published this week. But today, many more planners are using them to create a stream of income or a cushion against market declines.

WSJ speaks with two financial planners including Harold Evensky, co-author of a study at Texas Tech that has brought reverse mortgages into recent headlines. The article writes:

 

“Using your nest to help with your nest egg is becoming a more common way to round out a financial plan during retirement.

Even after the bursting of the housing bubble, the biggest financial asset many retirees have is their home. But because that money is tied up in the equity of the house, it’s an investment that has been difficult to count on as a source of income.

Reverse mortgages have long been an option. However, until recently, they were the Wild West of retirement planning. High upfront costs, poor disclosure and dodgy sales pitches made them an option that many advisers avoided.

Now, with the introduction of reverse mortgages backed by the Federal Housing Administration in late 2010, more financial planners are adding them to their tool kit.

Primarily, they’re using them as a way to provide a steady stream of tax-free income that can last the rest of a retiree’s life. They can also be used as a way to provide a cushion against a big, but temporary, drop in the markets….”

 

Read the full article at WSJ.com.

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About Me The Trentini Team of F.C. Tucker EMGE REALTORS® provides exceptional service to each of their clients as they help them to achieve their real estate goals. With their knowledge, experience and background, both Kathy and Rolando bring one-of-a-kind perspectives to the table during all of their real estate transactions. Their excellent communication skills combined with their passion for real estate allows The Trentini Team to follow through every time with the highest level of service possible. Rolando and Kathy are your premier Evansville and Newburgh, Indiana real estate source. They can help you buy your dream home or sell your current home for the best price possible. To learn more about what The Trentini Team can do you for you, contact us today!