The state of the economy has retirees really feeling the stress of the recession we just experienced. While we are still not out of hot water yet, there are signs of economic recovery in the horizon. Baby boomers and current retirees are still quite concerned that they may not have enough money to live off of during their retirement. Thousands of baby boomers have lost their jobs and have not been able to replace them with the same salary. They have had to take jobs at lower wages. Their 401(k’s) and pension plans have diminished in value. Although stocks have started rebounding, their 401(k’s) are still not where they were prior to the recession, the mortgage meltdown and housing crisis. Since many retirees and baby boomers lost a lot of their equity in their homes as a result of the down real estate market, they are considering either getting a part-time job or postponing retirement. The golden years are not looking as bright and golden as most hoped. Many retirees have a hard time paying their utility bills, buying food and medicines. They have had to cut out entertainment and travel. Some have been forced to sell their homes. While others have lost them to foreclosure.
Statistics from the Congressional Budget Office reflect that retirement assets across the nation lost approximately $2 trillion in value during the recession even though a portion will be recovered over time, some retirees cannot wait. That is why many seniors are opting for a reverse mortgage. A reverse mortgage allows persons 62 or older to take the equity out of their home and not have to repay the mortgage back until they move, sell the property or die. They can use the money for whatever they need and do not have to worry about making a monthly mortgage payment. To some, a reverse mortgage is the answer to their prayers. They don’t have to burden their children; they can remain independent and have the flexibility to enjoy their retirement. While there are some disadvantages of a reverse mortgage such as the fact that you may not be able to leave the home to your children as an inheritance, the benefits outweigh the disadvantages for most retirees.
Before you opt for a reverse mortgage, you should speak to your attorney or accountant to make sure a reverse mortgage is the right option for your financial situation.