Imagine the bank depositing monthly premiums into your account instead of you writing a mortgage check. That’s basically how a reverse mortgage works.
With Baby Boomers already rolling into retirement and Gen X looking forward to shrugging off the stress of the 40-hour work week, downsizing could be a strategic move.
If you’ve had to watch your parents transition into assisted living, you may have no desire to call such a place home. You are not alone. According to the Aging in Place Housing Survey conducted by the American Association of Retired Persons (AARP), more than 90 percent of seniors want to remain in their home.
If you are nearing retirement, a reverse mortgage might be right for you. This type of mortgage essentially allows you to turn your home equity into cash. If you find yourself with little money, a reverse mortgage could be the perfect solution, and here’s why.
You have worked hard for most of your adult life and the day has come that you will retire and enjoy the freedom of your golden years.
You might take up a hobby, volunteer, or just enjoy working in your garden and socializing with your friends.
If you have been planning ahead and contributing to your retirement fund, you will likely have a nest egg built up which will help you support yourself once you leave your job.
However, it is important to keep your expenses down when you are retired so that your spending won’t outgrow your savings.
If you can reduce your outgoing costs during your retirement years, you can stretch out your savings fund for longer and not have to worry about running out of money.
Here are a few ways that you can reduce your expenses during your retirement: