Another Reverse Mortgage Benefit: Helping Delay Social Security
Just about everyone knows by now that the single best way to boost your Social Security benefits is to wait as long as possible before you start drawing them. While 35-40% of adults start drawing benefits at the earliest allowable age (62 for most), the fact is that unclaimed benefits grow at about 8% per year from age 62 until they max out at age 70. Waiting those extra years makes a huge difference in a retiree’s income.
But what if you can’t afford to wait? The question for a financially strapped adult in his or her early 60’s is stark: how do you bring in enough income to live until you start drawing Social Security benefits? According to a recent article on the Huffington Post website, a reverse mortgage can be the answer. Click here to read this helpful piece.
Even some financial experts formerly skeptical about reverse mortgages have come around in recent years (for example, Jane Bryant Quinn), thanks in part to changes in regulations that have made these financial instruments safer for consumers. Now the Huffington Post article gives another excellent reason why a reverse mortgage can be extremely beneficial. The income from the reverse mortgage, officially called an HECM (Home Equity Conversion Mortgage), can provide the extra funds needed to allow a senior to wait years longer before Social Security benefits start coming.
As the Huffington Post article points out, proceeds from a reverse mortgage can be paid in a variety of ways: a lump sum payment, a line of credit, or a monthly amount. A mortgage holder could elect to receive a monthly payment that matches the Social Security payment you’d be receiving at age 62. The article’s author, Michael Lazar, says, “It’s a unique way to tap into your retirement income early without having to take out your [Social Security] benefits right away.”
However, Lazar adds an important caveat. “Of course,” he writes, “like any other big financial decision, you should always seek advice from industry experts.” We agree. That’s why we have established a solid relationship with reverse mortgage experts such as Laura Kiel of Kiel Mortgage. Before a client decides whether or not to pursue a reverse mortgage, we strongly recommend they meet with an expert like Laura to explore all their options and get all their questions answered. If a reverse mortgage is something you have considered, contact our office and we will discuss some next steps with you.
We would welcome the opportunity to talk with you about all aspects of retirement, from finances to health, from housing to legal issues, and even how to involve your family in your retirement plans. Why not attend one of our free LifePlanning Seminars? We hold these events at locations throughout the region, so simply click on the Upcoming Events tab on this website and you’ll see all your choices. You can also reserve your place at the seminar of your choice by pre-registering on the website. Remember, there’s absolutely no cost or obligation.
It will be a pleasure to help you make the choices that will allow you enjoy a fruitful, secure retirement.
(originally reported at www.huffingtonpost.com)
Can you still grow SSA benefits until age 70? Is there still some version of the old file and suspend technique available? I thought that was no longer available due to recent changes in the system. Letting social security continue at a 8% growth rate until 70 is certainly a reason to consider a reverse mortgage to help (if needed) until that delayed filing.