According to Census data for 2020, nearly half of working-age Americans don’t have any retirement savings. Savings rates rise with age, but only to a point. In the 55- to –64-year-old boomer age group, 58 percent of Americans own retirement accounts.
The fact that less than half of baby boomers have retirement plans is a concerning issue. Retirement planning is essential to ensure financial stability as we age, and not having a plan can lead to a lot of stress and uncertainty. In such a scenario, reverse mortgages can provide a useful financial tool to help baby boomers achieve financial security during retirement.
First and foremost, reverse mortgages can allow baby boomers to tap into the equity in their homes. This can provide a source of income that can be used to supplement retirement savings, cover expenses, and improve overall quality of life. Since reverse mortgages don’t require monthly payments, the homeowners can use the proceeds from the loan to cover expenses without adding to their financial burden.
Furthermore, reverse mortgages can provide an opportunity for baby boomers to age in place. Many older adults prefer to stay in their own homes as they age, but the cost of maintaining a home can be challenging. With a reverse mortgage, older adults can use the equity in their homes to make necessary repairs and modifications, making it possible for them to stay in their homes and maintain their independence.
Another advantage of reverse mortgages is that they can help reduce financial stress. Retirement can be an uncertain time, especially for those who haven’t saved enough. A reverse mortgage can provide a reliable source of income that can help baby boomers feel more financially secure, reducing the stress and anxiety that often come with financial uncertainty.
Overall, reverse mortgages can provide a valuable financial tool for baby boomers who don’t have retirement plans. By allowing older adults to tap into the equity in their homes, age in place, and reduce financial stress, reverse mortgages can help improve overall quality of life during retirement. However, it’s important to note that reverse mortgages may not be the right solution for everyone, and it’s essential to work with a reputable lender.
Reverse mortgages are available to individuals and married couples age 62 and over. The loan must be taken out on the primary residence where the borrower lives which meets HUD guidelines, or it can be used to purchase a home that will be primary residence. The funds can be accessed via a line of credit, monthly payments, or a lump sum.
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.