The National Institute on Retirement Security reports that, although many Americans spend a long time preparing for retirement, the topic still causes great concern for 56% of them. A significant portion of these people are unsure if they can afford a comfortable retirement and worry about running out of money.

Your home can be more than just a place to live during your retirement. It can actually help supplement your income or serve as a much-needed source of liquidity. A reverse mortgage is one way to achieve this, allowing you to reduce monthly expenses and generate an income all at once. For people in the right circumstances, a reverse mortgage can offer access to cash flow that would otherwise be inaccessible.

In What Situations Would A Reverse Mortgage Make The Most Sense?

A reverse mortgage can often be a good idea for people who don’t want to have to dip into their savings accounts too early, especially if those funds are tax-advantaged. A reverse mortgage can help retirees in a number of ways, such as:

Cut Down On Monthly Bills

If you’re a homeowner over 62, you may qualify for a reverse mortgage. This would free up extra cash each month by eliminating your monthly mortgage payment from your budget. In turn, this could positively impact your financial situation in retirement by reducing the amount of money going out and freeing up funds for other uses. For example, you might not need to draw down on other retirement accounts as quickly, which can help those accounts last longer.

Although a reverse mortgage may seem like it eliminates home-related expenses, borrowers need to remember that they are still required to pay monthly items such as property taxes, homeowner’s insurance, and any dues associated with their home. They must also take care of the maintenance of the property.

Create A Stream Of Income

A reverse mortgage might make sense for a retiree who wants to access the funds currently tied up in their home. Like a line of credit, the borrower can use a reverse mortgage to pay current expenses or create a pool of money available for later. Also, because it is a loan, any proceeds from the reverse mortgage are income tax-free.

Postpone Social Security Benefits

If you’re 62 or older and think you may need to cover some expenses in retirement, a reverse mortgage may help take care of those for you. By utilizing a reverse mortgage and postponing social security, your social security benefits can be increased when you do choose to start receiving them. Though citizens are eligible to receive social security payments at 62, they could get up 30% more each month if they wait until full retirement age.

Give To Your Loved Ones Or Support A Cause You’re Passionate About

Some retirees opt to apply for a reverse mortgage not because they need the money, but to spread their wealth during their lifetime. With a reverse mortgage, they can access home equity to fund college educations or buy homes for children or grandchildren. That way, they can enjoy seeing the impact of those gifts during their lifetime.

Many people find that a reverse mortgage is most beneficial during retirement, as it allows them to convert their home equity into cash. This can be especially helpful if your home represents a large portion of your net worth. Call 770-826-0222 to speak to a mortgage professional or get started on your loan application process today.