Using Your Home Equity to Improve Your Retirement
A NEW ALTERNATIVE TO THE OPTIONS YOU KNOW
Many Americans spend much of their working lives saving for retirement. Everyone knows the significance of funding their 401k, stashing some money away in securities, and investing in real estate. The question is: how do you use those investments once you retire to supplement your income?
There are many ways to tap into your assets, but you need to be careful how you go about it especially for your retirement. Some options may have downfalls, for example:
• Cashing out your 401k too quickly may trigger a large tax burden.
• Accessing your home equity can lead to high interest expenses and could turn out to be costly.
• Taking out a line of credit can involve making monthly payments that decrease your retirement income.
• Selling your home may be an option but what if you want to stay in it? And your other options come with large expenses.
None of those options really serves to increase your retirement cash flow. An alternative way for seniors 62 and older to access their home equity after retirement, is through a reverse mortgage.
• A reverse mortgage will eliminate your monthly mortgage payments.
• You may also be able to receive payments that come from your home equity or a line of credit that grow.
• These funds can be set aside and used when needed.
• Most importantly, you retain ownership and title to your home.
There are interest and fees associated with this type of financing, but it’s likely that the interest is lower or comparable to other financing.
You’ve been paying for your home for much of your life. Isn’t it time you let your hard work pay you back?