A Reverse Mortgage to Increase After-Tax Wealth
By Emily Study
A recent column published by the Wall Street Journal states that using proceeds from a reverse mortgage could help retirees strategically maximize the after-tax value of their wealth.
In his column, Wade Pfau — a professor of retirement income at The American College in Bryn Mawr, Penn. — suggests that reverse mortgage proceeds can boost spending without increasing taxable income.
Comparing reverse mortgage proceeds to those from a Roth IRA, Pfau writes, “Roth distributions can be useful to fill in income needs without entering into a higher tax bracket. Roth distributions do not count as part of taxable income, and they do not count on the income used to determine the taxability of Social Security benefits.”
Though fairly new to the industry, Pfau has championed reverse mortgages in previous articles, noting that financially responsible individuals can improve their retirement sustainability with the loan.
For a copy of this article and more information regarding reverse mortgages call Laura Kiel, at Kiel Mortgage today!
