Retirement Archives - Page 6 of 12 - Colorado Reverse Mortgage Specialist

Category: Retirement

Should Reverse Mortgage Be Part Of Your Retirement Portfolio?

Posted on October 9, 2020October 19, 2020 by janjordan

For the past quarter century seniors have easily managed to retire on three things: company pension plans, social security, and personal savings. But with an uncertain economy in front of us, baby boomers are being forced to take a second look at their retirement portfolios. Previously, tapping into home equity for retirement has been considered a last resort. But should it be?

Both company pensions, personal investments, and social security benefits face much uncertainty down the road. And if retirees have had the ability to hold onto any personal savings during the economic downturn, it likely took a hit as well. But when adding home equity into the retirement equation, statistics show most baby boomers 51 and over have enough to retire comfortably. So where does this leave reverse mortgages?

In a recent Forbes article, author and retirement income planning expert, Jamie Hopkins says: “Home equity is often forgotten as a potential retirement income source. If you do bucketing correctly and in a holistic manner, your home should be in the plan.”

And he’s absolutely right.

For seniors 62 and over, reverse mortgage is something that should be considered when seeking retirement funding solutions. Homeowners can access the equity in their home and no repayment is due until the last borrower passes or permanently leaves the home. For retirees, it could mean the difference between living, living comfortably, and living out retirement dreams.

When looking down the road toward financial planning for retirement, ask yourself a few questions and determine if a reverse mortgage might fit into your Plan A or your Plan B. Discuss it with your spouse and with your financial planner. Learn the facts about reverse mortgage and how it will affect your loved ones after you pass.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, and Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.

Delaying Social Security Benefits With A Reverse Mortgage

Posted on September 4, 2020September 14, 2020 by janjordan

When planning for retirement, there will no doubt be a discussion about when a retiree should start taking their Social Security benefits.

There are perks to delaying, for example Social Security benefits stand to increase as much as 7-8% per year if you don’t apply until age 70. But many seniors need this income. With the ability to apply for a reverse mortgage at the age of 62, and current low interest rates, retirees stand to actually make gains by using a reverse mortgage to supplement while delaying benefits.

When approved for a reverse mortgage, the borrower can choose from a variety of ways to access the funds. It could be a monthly installment, a lump sum, or even a line of credit that in itself stands to grow over time.

This is a creative way to use the hard earned equity in your home to your benefit. A well educated financial advisor would easily be able to help you decide if this is a good option. Reverse mortgages are available to seniors 62 and over, including married couples, with an approved type of home. The borrower will always retain the title to the home and reverse mortgages are insured by the FHA.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Lupton, Erie, Lafayette, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.

The Reverse Mortgage Line Of Credit Is Highly Unique And Here’s Why

Posted on August 21, 2020September 14, 2020 by janjordan

The HECM Reverse Mortgage Line of Credit is still relatively new, and to this day many within the financial and retirement industries haven’t fully grasped how it works. Well, they need to get on board because consumers are interested – and they should be. Here’s why..

First, what is a line of credit? Simply put, a line of credit are funds available to you through a financial institution that you can access as needed, or not at all if the need doesn’t arise. Interest is not acquired if the funds are not used. This makes line of credit options excellent safety nets, especially for the purpose of creative retirement strategy.

When looking at a HECM Reverse Mortgage Line of Credit, the two are obviously intertwined, meaning the qualification requirements for any reverse mortgage still apply. These are: age 62 and over, using your primary residence for the loan, this home must meet HUD’s guidelines and needs to be either paid off or have substantial equity, and the borrower must have the financial capability to continue to pay homeowners insurance, property taxes, and the like. Because there are various options to receive the payout from a reverse mortgage, the line of credit is only one of them.

When you have a reverse mortgage line of credit, you have money that is available to you — but you only accrue interest on the money you withdraw. This means the reverse mortgage line of credit can act as an excellent back up source of funds or can be used for retirement fun, whether it be vacation, spoiling grandchildren, or knowing you have the funds available when you’re ready to take on new ventures.

There are other benefits though. This line of credit is pretty astounding beyond just being a safety net.

Growth: Not only are you not paying interest, but your untouched reverse mortgage line of credit can grow in value. Money in a reverse mortgage line of credit grows at the same rate as the interest rate on the loan PLUS 1.25% monthly. So, if the interest rate on your reverse mortgage is 2.50%, then your line of credit will grow at 3.75% (2.50% + 1.25%).

Unique: This growth is unique to reverse mortgage lines of credit — a HELOC for example does not grow.

Hedge Against Falling House Prices: The growth in a reverse mortgage line of credit is guaranteed — without withdrawals, your line of credit is guaranteed to grow. This means you lock in the current value of your home without taking out an interest acruing loan.

Pretty great, isn’t it?

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Firestone, Fort Lupton, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.

The Reverse Mortgage Line Of Credit Is Increasing In Popularity – Here’s Why

Posted on July 3, 2020July 6, 2020 by janjordan

There are other benefits though. This line of credit is pretty astounding beyond just being a safety net.

Unique: This growth is unique to reverse mortgage lines of credit — a HELOC for example does not grow.

Pretty great, isn’t it?

USA Today: Retirement In The Time Of Coronavirus

Posted on May 8, 2020May 13, 2020 by janjordan

For most people, achieving a comfortable retirement is a tricky business. The past few weeks have added to the challenges as the world has changed as much as in any period since WWII. The world is now fighting the coronavirus pandemic. COVID-19, as well as the measures taken to slow the spread of the disease, have caused financial and health crises worldwide and have especially affected those who are older than 60. This has made financial and other life decisions for seniors and those planning for retirement infinitely more complicated than they were just two months ago.

24/7 Wall St. looked at the challenges and opportunities people should consider as they move into retirement, particularly at a time of great upheaval and insecurity. This piece is intended to help those who are facing retirement today make choices to best secure their future as the economy collapses to a level last matched at the end of The Great Depression.

In this USA Today article you will find information about 401k contributions, IRAs, Social Security, Reverse Mortgage, downsizing, debt and fixed incomes, and more. Read the entire article here: https://www.usatoday.com/story/money/2020/04/13/what-you-can-do-if-coronavirus-is-threatening-your-retirement/111526548/

Jan Jordan is a Reverse Mortgage Specialist serving the Erie, Dacono, Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming. Contact Jan and learn if reverse mortgage is right for you.

What’s Older Americans Need To Know About Coronavirus Stimulus Checks

Posted on April 15, 2020April 15, 2020 by janjordan

As part of the coronavirus relief program (CARES Act), millions of Americans are already receiving stimulus funds, and millions will continue to do get them over the coming weeks. The amount an individual will receive depends on their marital status, if they have dependents, and how much income they had in 2018 or 2019.

Those who receive Social Security benefits will be included in the recipients. Here’s what they need to know:

1) If you’re collecting Social Security benefits of any kind you are eligible to receive a stimulus check. This includes retirement benefits, disability benefits, or Supplemental Security Income (SSI).

You will also need to meet the other eligibility requirements. Those are:

You cannot be claimed as a dependent on someone else’s tax return.
In order to receive the full $1,200 stimulus check, you must have an adjusted gross income of less than $75,000 per year (for individuals), $112,500 per year (for heads of household), or $150,000 per year (for married couples filing jointly). If you’re earning more than those limits, you’ll either receive a smaller check or no check at all.

2) Most Americans will need to have filed a 2018 or 2019 tax return to receive their stimulus checks, but that rule doesn’t apply to Social Security beneficiaries. The Treasury Department has said it will use the information the Social Security Administration already has on file to determine who is eligible to receive the checks. That means if you’re currently receiving benefits, you shouldn’t need to do anything to get your check. If you normally receive your benefits via direct deposit, that’s how you’ll receive your check as well. If your benefits come in the mail via paper check, you’ll receive a paper stimulus check.

3) With the rise of the COVID-19 pandemic, many Americans have become prime targets for scammers, and unfortunately this is even more serious among senior citizens. One of the most prevalent are Social Security scams where a fraudster will call, email, or send letters to beneficiaries telling them their monthly checks have been suspended because of COVID-19. Fraudsters will then demand the senior citizen’s personal information or “require” they make a payment to get your benefits reinstated, thus stealing critical personal and financial information. It’s important every day, but especially important right now to be extra cautious. Here are my tips to watching out for scams.

More information can be found at: www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder, Erie, Dacono, Fort Lupton and other Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.

Retirement Changes For Coloradans Included in Coronavirus Relief Bill

Posted on March 30, 2020March 30, 2020 by janjordan

The recently passed $2 trillion coronavirus relief bill included a series of key retirement provisions. These would relax rules on retirement savings and include the option to take a hardship distribution of up to $100,000 from a 401(k) plan without the 10% early withdrawal penalty if you are under age 59 1/2.

Retirees can also suspend required minimum distributions out of their retirement accounts for 2020. This gives retirees flexibility especially if they don’t need the income.

According to a CNBC article, here are the three retirement relief measures in the package:

Tax-favored plan withdrawals

The bill would allow affected savers to take coronavirus-related distributions of up to $100,000 from retirement plans and individual retirement accounts in 2020.

Those individuals are defined as people who are diagnosed with COVID-19, spouses or dependents who have the disease or those experiencing financial consequences from quarantine, furlough, layoffs or having their hours cut due to coronavirus.

If you’re under age 59½, these withdrawals would be exempt from the 10% penalty that would normally apply.

You’re still on the hook for income taxes on any amounts withdrawn, but the bill right now would give you three years to pay these levies.

“You take the money out penalty-free, that’s OK— but you still owe the tax,” said Ed Slott, CPA and founder of Ed Slott & Co. “You’re still reducing your retirement savings and you still pay the taxes.”

You also have three years to replenish the money you had taken from your retirement account.

Bigger plan loans

The bill would also allow you to take larger loans against the money you’ve saved in your workplace retirement plan.

Normally, you can borrow only up to $50,000 or 50% of your vested account balance, whichever is less.

The measure would double that: up to $100,000 against the amount you’ve saved in your plan.

Plan loans follow a different set of rules than withdrawals. You can borrow against your savings tax-free if you meet certain requirements. If you fail to repay the loan, it’s treated as a distribution and subject to taxes.

Know your employer’s approach to loans, as some plans may require you borrow from your savings before taking a hardship withdrawal, said Paul Porretta, partner at law firm Pepper Hamilton in New York.

Break on required minimum distributions

Starting in 2020, individuals who turn 72 are required to take annual mandatory distributions from their workplace retirement plans and their IRAs.

In prior years, this requirement kicked in after savers turned 70½ years of age.

This is known as the required minimum distribution.

The bill would suspend those RMD payments for 2020, a move that will keep taxpayers from drawing down on savings at a time when the market is in flux over COVID-19 worries.

“The relief bill is for people who are struggling, but this provision isn’t really for people who are struggling,” said Jeffrey Levine, CPA and director of advanced planning at Buckingham Wealth Partners on Long Island, New York.

“This is for people who have enough money that they don’t need to take from their retirement accounts,” he said.

How A Reverse Mortgage Can Eliminate Traditional Mortgage Payments

Posted on March 9, 2020March 30, 2020 by janjordan

It’s not uncommon that I get questions about why a senior may want to use a reverse mortgage to pay off an existing conventional mortgage loan. This scenario would vary from person to person, but in the long run, if the equity in the home can eliminate a mortgage payment without acquiring another loan payment, it’s often a win-win.

A reverse mortgage is essentially a home equity loan in which the borrower is not required to make payments. The homeowner must be at least 62 years old and meet certain income and credit guidelines. Although a reverse mortgage does accrue interest, it does not have to be repaid until the last borrower passes away or leaves the home permanently. Almost all of these loans are FHA insured. There are certain things like property taxes and HOA fees which the homeowner will still be responsible for.

Here is a scenario:

Barbara is a 75-year-old widow with a house worth $495,000. She still owes $125,000 on her conventional mortgage, with no other mortgage debt such as a HELOC.

Based on her age and the home’s value, she can get a reverse mortgage that would not only pay off her mortgage but give her extra funds as well that could be accessed via a line-of-credit.

She could live mortgage payment free for the remainder of her time in the home.

A common question with reverse mortgage is who technically owns the home? The borrower does. They will retain the title and can make modifications or upgrades to the home.

In addition, this is a great option for eliminating a HELOC (home equity lines of credit).

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado. Click here to contact Jan and learn if reverse mortgage is right for you.

Understanding Different Reverse Mortgage Professionals

Posted on February 24, 2020February 28, 2020 by janjordan

When you start navigating the waters of reverse mortgages, you will undoubtedly come across MANY different companies and individuals ready and willing to help. Flashy ads, website calculators, famous spokesmen, and more. But who are all these people? And what is the difference between them? How do you know what is the best fit for YOU?

Here’s some information I think anyone considering a reverse mortgage needs to know about the various professionals who work in the industry:

Banks and Credit Unions – Most local banks and credit unions do not offer reverse mortgage loans, although sometimes the larger ones will. Unfortunately seeking a loan through them can often mean little or no face-to-face time, and it’s not uncommon for these banks to leave the industry down the road. At one time Wells Fargo and Bank of America were in the business, but they quit, leaving their borrowers with loans that few employees can understand and little help if reverse mortgage customers need it.

Brokers – A reverse mortgage broker is a third party individual that is licensed by the state but doesn’t work directly with a lender, instead they essentially shop the marketplace. When working with a broker, borrowers will pay higher fees because they will have to cover the costs of the broker. In addition, because all transactions run through a third party, things can easily get slowed down or even stalled completely.

Direct Lender Specialists – This is the category I fall into. Working directly with a lender that specializes in FHA insured HECM reverse mortgages, such as Mutual of Omaha, direct lender specialists are able to offer local, personal, face-to-face time with clients, and eliminate the need for costly third-party fees. We are able to do all this while ensuring the smoothest, most efficient transaction possible because they are handling the loan and not farming it out to another company.

Reverse mortgages are available to individuals and married couples age 62 and older. These FHA insured loans allow homeowners to live mortgage and loan payment free until they pass away, permanently leave the home (meaning 12 consecutive months), or they default on financial responsibilities associated with the home, such as property taxes or homeowner’s insurance. The funds are available via monthly installments, a line of credit, a lump sum, or even to purchase a home.

How to Use Home Equity for Retirement Security Through A Reverse Mortgage

Posted on February 10, 2020February 17, 2020 by janjordan

Did you know home equity can be used to reduce the overall risk of your retirement plan? Your house is a great asset that for many years has been overlooked in financial planning for seniors. This is making a sharp turn lately as retirement experts are beginning to understand how tapping into home equity via a reverse mortgage should never be underestimated.

Let’s take a look at where most seniors sit currently when it comes to retirement…

• Only 22 percent of workers are very confident they will have enough money in retirement.

• 45 percent of Americans have saved exactly nothing—zero.

• The expected lifespan of women is 20 years past the age of retirement, and two years longer than men.

• The average retiree can expect to spend $220,000 in out of pocket health care costs during retirement.

• Medicare pays for an average of 62% of a seniors health care costs, leaving 38% to come out of pocket.

• 36% of up and coming retirees will rely on Social Security as their sole income.

A reverse mortgage can help in many different ways – and the how the funds are spent is entirely up to the borrower. Whether it’s a monthly payout or a line of credit, when combined with other retirement planning tools, reverse mortgage can allow retirees financial security during the years they worked so hard to enjoy.

Reverse mortgages are available to senior homeowners 62 and over – even married couples. They will live mortgage payment free, always retain the title to the home, and because these loans are FHA insured non-recourse, no one – including heirs – will find themselves saddled with the debt after the owner passes. There are also various solutions for adult children or other family members who may want to keep the home in the family.

Jan Jordan is a Reverse Mortgage Specialist serving the Fort Collins, Loveland, Greeley, Longmont, Boulder and other Front Range areas of Colorado, as well as the Cheyenne and Laramie communities of Wyoming. Contact Jan and learn if reverse mortgage is right for you.