January 29, 2015 | By RGR Marketing Blog

Do You Have Enough Cash for Your Retirement?

Upon reaching retirement age, many of those getting ready to leave the workforce are surprised to find that their retirement benefits don’t quite allow them to live the lifestyle they’ve grown accustomed to.

Given the choice between continuing to work well into retirement age and reducing monthly expenses in order to enjoy one’s golden years, many soon-to-be retired folks will choose the latter, hands down.

For those who are still paying off a mortgage, the monthly payment is likely one of the largest expenses on the monthly budget. Fortunately, there are ways to reduce that monthly mortgage payment, thereby allowing mature adults to cut costs – giving them more room to kick back and enjoy themselves.

Switch to a Fixed Rate Mortgage

If you or your clients purchased your home at a time like this, when mortgage rates were historically low, an adjustable-rate mortgage may have seemed like a good idea. And it may have actually worked out well for your client. But when they’re working with a fixed income, they will want to eliminate as many unpredictable variables as possible.

After all, once the initial fixed-rate period of five to seven years has passed, an adjustable rate mortgage could end up becoming the source of unpleasant surprises, should interest rates jump.

And while converting to a fixed-rate mortgage may slightly raise the mortgage payments in the mean time, at least your client will be able to accurately predict the future monthly costs.

Extend the Mortgage Term

Affording a monthly mortgage payment while you or your client is at the peak of your earning power may be one thing, but as a person reaches retirement age, they’ll likely be trading in long hours and big paychecks for pursuing personal hobbies and spending time with the people who matter most.

It’s a worthwhile tradeoff, but everyone still has to make ends meet. If you or your client still has more than 10 years to go on a mortgage, then you may want to consider refinancing the existing debt for another 30 years. True, it’ll take longer to pay off, and you’ll probably end up paying more overall, but when monthly cash flow is a primary concern, it may be a worthwhile tradeoff.

Reverse Mortgage

With a normal mortgage, a person makes monthly payments until they own their home. In a reverse mortgage, the lender pays you instead. Loan advances are not taxable, and they don’t typically affect your Social Security or Medicare benefits. Sounds great, right?

If you’re thinking there must be a catch, then you’re correct. Reverse mortgages must be repaid when the last surviving borrower passes away, sells the home, or moves into a care home or other residence. So if you or your client is hoping to keep the house in the family after passing away, then a reverse mortgage may not be the best option.

On the other hand, if you fully understand the risks involved and are willing to take your chances, a reverse mortgage can provide a much-needed boost to your current economic situation while in retirement.

[Photo Via: HuffPo]

Contact Us

Get started with free* leads.
Call us at 310-540-8900
Don’t take our word for it—find out for yourself how good our leads are and what a difference working with us can make.
Call us at 310-540-8900 or fill out the form below and we’ll tell you how you can get high quality leads for free*.
I authorize ReallyGreatRate, Inc. to communicate with me via email.
* Get up to 10% free leads on your first order!

Let's talk

Start making more money today

Mortgage

Solar

Home Improvement

  • I authorize ReallyGreatRate, Inc. to communicate with me via email.