Throughout your career, there are many financial challenges that may arise that can potentially jeopardize your savings like medical emergencies, unexpected job loss, natural disasters and more. When these unexpected life events happen, they often get prioritized over allocating money into retirement savings.
Today’s workforce has yet another challenge that is making it more and more common to divert money away from retirement; paying down large amounts of debt. A study by the Employee Benefit Research Institute found that this number is staggering, with 60 percent of workers surveyed sharing that their debt level is a problem and 70 percent reporting that they’ve been unable to save for retirement because of this debt.
Once retirees reach their retirement years, they need around 70 to 80 percent of their previous income to live comfortably. With Social Security only replacing around 40 percent of the average retiree’s income, a lack of savings to supplement benefits can become a huge problem that greatly impacts quality of life.
Whatever your age, you should be thinking about your financial strategy for your retirement years. Retirement and the need to plan for it is closer than you think and planning now may save you from financial struggles and stress down the road.
If you’re already nearing retirement and haven’t set yourself up for financial security because of debt or other unplanned circumstances, you may want to look into a Home Equity Conversion Mortgage (HECM)* as a possible financial safety net.
A HECM loan is a special loan designed to help homeowners trade some of their home equity for cash. Essentially, instead of borrowers making payments to lenders, lenders are the ones making payments to borrowers. The loan is then repaid once the homeowner sells the property or leaves it to family members. Funds can be withdrawn on a flexible schedule determined by the borrower.
Think a HECM loan may be the right solution for you or want to learn more? Contact us today to learn more about your options, and let’s plan for a stable financial future together.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.