This article is part of a series; click here to read Part One. Moving to bonds, Morningstar data shows that since 1926, the average return from intermediate-term government bonds was 5.2 percent with a standard deviation of 5.6 percent. With the lower volatility, the compounded return is only slightly less at 5.1 percent. For long-term […]
Though reverse mortgages have long held a bad reputation, research and public policy in recent years are shedding new light on their potential uses in retirement.
Reverse mortgages have gotten a bad rap. Admittedly, a lot of it was deserved. A bad rap doesn’t just happen without something to base it on. But a lot has changed since Fred Thompson was selling them on daytime TV. Now, reverse mortgages are tightly regulated at both the federal and state levels, not to […]
Most retirees struggle with how to deal with their emergency fund. It’s there to help you deal with, well, emergencies. Retirees are just as prone to emergency as others, if not more so.
When it comes to financial planning, Vanguard’s “Alpha” and Morningstar’s “Gamma” are really just the tip of the iceberg.
You should be familiar with all of the tools in your retirement income toolbox. Retirement plans can be built to manage varying risks by strategically combining the following retirement income tools in different ways.
“Although reverse mortgages aren’t for everyone, the reluctance to consider use of reverse mortgages in the distribution phase limits the flexibility of distribution strategies.”
Maintaining higher fixed costs in retirement increases exposure to sequence risk by requiring a higher withdrawal rate from remaining assets. Drawing from a reverse mortgage has the potential to mitigate this aspect of sequence risk by reducing the need for portfolio withdrawals at inopportune times.
One option in the broader category of using reverse mortgages for debt coordination for housing is the HECM for Purchase program, which was started in 2009 as a way to use a reverse mortgage to purchase a new home.
After my recent overview of potential uses for a reverse mortgage, I want to go deeper on each item.