According to AARP, there are 18.3 million households with people aged 45-64 with no retirement savings. The result is that more than half of all retirees are at risk of not maintaining their standard of living in retirement. Two thirds of retirees get most of their retirement income from social security. The average retiree is only receiving $1,230 in monthly benefits. The reality for millions of seniors today, is trying to live for the rest of their lives off of a monthly income of $1,230.
Clearly there has to be some rethinking about when people retire and how they will pay for it when they do. Until recently, you would rarely hear of using home equity as part of a retirement planning solution. Although, home equity usually accounts for the largest proportion of personal wealth. It has generally been viewed as a last resort method when dealing with a a retirement financial crisis.
Fortunately, we are beginning to see a greater consensus and acknowledgement that home equity release products are, and should be, part of the conversation. Reverse mortgages can be custom tailored to help solve the retirement needs of individual borrowers. Reverse mortgages can be used in many ways as part of an overall retirement plan.
Cash flow is very important to retirees living on a small fixed income. A reverse mortgage can provide a guaranteed monthly income check, as well as eliminate the monthly mortgage payment. A lump sum cash sum option can also be utilized to pay down monthly debts.