GRAND Magazine - March/April 2013 - (Page 48-49)
money matters
Cash poor but home-equity rich?
A lousy investment worth looking into
by DeNNis Miller
O
ne of the biggest challenges facing many
retirees is how to bridge the gap between
ever-rising expenses and virtually stagnant
Social Security checks and other sources of income.
In a recent edition of Miller’s Money Forever, our
team took an in-depth look at reverse mortgages,
health takes a turn for the worse and you need to move
to an assisted-living facility, those checks stop coming.
something many retirees turn to for extra income. I
With a reverse mortgage, you’re bargaining with
can safely say that for most people, they are a poor
your home, which for most folks is a large part of their
investment but not necessarily a bad idea.
personal wealth. And you don’t find out whether it’s a
With a reverse mortgage on your home, the bank
good or bad investment until you either die or move out.
sends you a monthly check until your 100th birthday.
Fortunately, Housing and Urban Development (HUD)
There are some upfront fees, and with each monthly
counseling is mandated for 95% of reverse mortgages.
check your mortgage increases. You must continue to
For any retiree struggling to meet monthly expenses,
live in your home as your primary residence. If you
I recommend meeting with a HUD counselor in your
move out and sell, any remaining equity after the
area. Even if a reverse mortgage is not right for you,
sale is yours to keep. If the mortgage is higher than
there are other options and many state and federal
your home’s selling price, you don’t have to make up
programs to help keep seniors in their home.
the difference.
It sure sounds nice, and yet the only way to turn a
reverse mortgage into a great investment is to live a
long life and stay in your home. The odds are stacked
against you, as you must outlive your actuarial lifespan
by five years or so to make it a good investment. If your
48 GRAND
MARCH APRIL 2013
Dennis Miller is the author of the
book Retirement Reboot and
the blog Miller’s Money Weekly,
and the editor of the newsletter
Money Forever.
MARCH APRIL 2013 GRAND
49
http://www.caseyresearch.com/go/bwdWy/GRM
https://entp.hud.gov/idapp/html/hecm_agency_look.cfm
https://entp.hud.gov/idapp/html/hecm_agency_look.cfm
http://www.millersmoney.com/dennis-miller
http://www.millersmoney.com/retirement-reboot
http://www.millersmoney.com/money-weekly/the-greatest-investment-i-ever-made
https://www.millersmoney.com/members/login
Table of Contents for the Digital Edition of GRAND Magazine - March/April 2013
GRAND Magazine - March/April 2013
Contents
The New Age Nana’s Guide to Step-Grandparenting
Grandparentland: What a Trip!
Pearls of Wisdom
Grands Make a Hobby More Fun
Earth Day Crafts for Grandkids
Al Gore: America’s Dudley Do-Right
Children’s Movement of Florida
How to Be a Traveler, Not Just a Tourist
Have Grandkids, Will Travel
Six Tips for Safe Travel
News, Products, and Resources for Today’s Grandparents
Cash poor but home-equity rich?
Top New Gizmos for Grands
The Distance Between Us
Florida’s Relative Caregiver Program
GRAND Magazine - March/April 2013
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