How Reverse Mortgages Turn Out to be a Valuable Part of Retirement Income Planning
If you are serious about retirement income planning then it will be important to focus on reverse mortgages. How? Let us delve into the details in the following sections. In addition to it, we will also go through few of the things you need to do to protect yourself from scammers, fraudsters, and predatory advisors.
Use of Reverse Mortgages in Retirement Income Planning
Now, with an increase in life expectancy, you can expect to have a retired life that spans 30 or more years. As such, it has become imperative that everyone invests time and energy into retirement income planning to have a financially secure future.Our aim here will be to analyze how reverse mortgages can be helpful in retirement income planning.
The good thing about reverse mortgages is that they help in leveraging value in your home to create an income stream that cannot be outlived. In addition to it, you also get to live in your house as long as you want to.
Ability to Reduce Sequence Risk
Sequence risk refers to risk your portfolio faces with respect to its longevity when it becomes necessary to make withdrawals at the time portfolio is relatively down (such as in early years when scheduled withdrawals are to be made). This is where a reverse mortgage comes into the picture as a viable option to create a line of credit that remains fixed and does not get affected by short-term volatility that bond and stock markets face. As such, you are in a better position to tackle this sequence risk due to the presence of alternate funding source in the form of reverse mortgages. Moreover, due to this financial security, your investment portfolio gets enough time to recover since you will not be accessing the investments.
How can retirees protect themselves from scammers, fraudsters, and predatory advisors?
Signs of Financial Abuse
Let us first look into some signs of financial abuse that seniors need to be wary of.
- Someone tries to or actually changes your will as well other legal documents.
- Your property or money is being utilized without your consent.
- Someone has forged your signature.
- A person fraudulently obtains guardianship or power of attorney.
- Someone tries to lure you into fraudulent investment or insurance scheme.
- You are a victim of identity theft.
Often times, scams can be quite subtle, making it hard to recognize them. As for instance, an insurance agent, financial advisor or a broker might put forward a supposedly lucrative investment opportunity that will be a low risk and high-security option. But, the real fact is that the primary goal of a financial advisor in suggesting such investment product will be to earn handsome upfront fees as well as hefty ongoing fees. Thus, working with a financial advisor who follows fiduciary standards will be the solution to these problems since such advisor will always have your best interest in mind while suggesting an investment opportunity.
To conclude we will say that reverse mortgages can certainly be helpful for you in your retired life. However, you need to tread safely while making other types of investments to avoid getting scammed.