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Author: Don Obrien

Financial Planner: Reverse Mortgage a ‘Proven’ Retirement Tactic at Age 62


Not everyone approaches retirement planning identically, but for those who may be curious about certain things they can do to potentially bolster their financial standing in their early 60s, one such path forward that is “proven” is accessing home equity by employing a Home Equity Conversion Mortgage (HECM).

This is a perspective shared by financial planner Robert Klein in a new column published by The Street. In addition to other, potentially more common strategies – including delaying the taking of Social Security benefits; taking action to reduce certain Medicare premiums; and a staged Roth IRA conversion strategy – a reverse mortgage may be able to provide additional cash-flow prior to retirement if someone is looking at ending their day-to-day work by age 65.

Robert Klein

“[H]ousing wealth, although it represents about one-half of an average household’s net worth, is often ignored as a retirement income planning tool,” Klein explains. “There are numerous strategies that can be used to provide readily available tax-free liquidity to pay for planned and unforeseen expenses throughout retirement by monetizing a portion of the equity in one’s home.”

Several such strategies can be used in concert with a HECM, Klein explains, with one key product feature playing a role in the potential conversation surrounding such a strategy.

“All homeowners age 62 or older with or without a mortgage should evaluate a potential HECM for its ability to provide unrestricted access to an increasing tax-free line of credit without the downsides of a home equity line of credit, or HELOC,” Klein writes. “When implemented early and used strategically to unlock illiquid home equity, a HECM reverse mortgage can be used to increase after-tax cash flow at opportune times throughout retirement while providing peace of mind.”

Klein, who was a guest recently on The RMD Podcast, discussed potential points of advice for reverse mortgage professionals seeking a financial planner as a referral partner.

“Just reach out,” he said on RMD #24. “I’ve reached out to people in the reverse mortgage business, various people that I’ve sought out, and experts in the business. I’ve enjoyed mutually beneficial relationships with these people, and I’ve learned a tremendous amount about [the product]. So, I think it’s a matter of reaching out to people that you see that are interested in the business, preferably. And then, just opening up other advisors’ eyes who might not be so obvious that they’re interested in the reverse mortgage business.”

Read the column at The Street.



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