Retirees have the least inflation protection of all demographics. When inflation hits, it hits the hardest on those with a fixed income and limited options for generating additional income. Going back to work at age 80 just isn’t a possibility for most of us but we still need options to live. That’s why HECM Reverse Mortgages are becoming so popular.
Why Reverse Mortgages?:
Nearly 80% of all Retired American’s own their own home. Of course most of these do have a mortgage on their home but the fact that they own their home is the key to their solution.
Statistics show that for most retirees 90% of their assets are locked up in their home in the form of home equity. Likewise for the majority of us, our monthly mortgage payment is the largest monthly expense we have to pay.
Key HECM benefits that provide Inflation Protection:
- Budget Stability: HECM’s offer the option of a Line of Credit. These funds can act as an emergency fund offering a financial buffer against life’s surprises.
- Expense reduction: A HECM does not have a required Monthly Mortgage payment. This eliminates what for most is their largest monthly expense. in addition, home equity can be used to consolidate other debts further reducing expenses.
- Additional Income: for some a HECM provides additional monthly income by allowing the homeowner to receive regular payments from the equity in their home.
Planning for Inflations Impact:
- Long-term financial planning: a Reverse Mortgage is just one of many tools that can be used to make a more stable and dependable retirement plan. Using this along with other financial products is far more likely to help someone improve their financial longevity even as life is becoming financially more challenging in retirement.
- Emergency Cushion: Some use their HECM actively as soon as they can. Others set it up as their back up cushion in case their primary plans such as 401k and pensions don’t perform as well as they hoped.
Retirees can combat the threat of inflation with a Reverse Mortgage. Using this tool they can secure their future, protect their retirement and maintain their peace of mind.