Nobel Laureate Recommends Reverse Mortgage as Retirement Funding Solution
Debunking The Negative Reverse Mortgage Myths
Robert C. Merton, Nobel-prize winning economist, professor at MIT, and global authority on retirement savings, believes that reverse mortgages present an excellent solution to a growing problem – how do we fund retirement?
The Good News
People are living significantly longer than before, and that longevity is only increasing. Not only are people living longer, but because of improved medical treatments and innovations, people stay active until a much later age, including working into their later years.
Now the Bad News
Increased longevity means that more money is required to fund your life. Working for 40 years and retiring for 10 years means that one must save about 20% of their income to fund retirement and maintain that similar lifestyle. If longevity increases by 10 years and the retirement age doesn’t change, then you now need to save 33% of your income and reduce your consumption by about 16%. For many, there simply is not enough left at the end of every month to set aside one-third of your income for retirement.
Forty percent of baby boomers have no retirement savings – this is a rapidly growing epidemic.
A Solution Exists
There is a simple solution to this increasing problem. Tapping into the equity of the assets you already have. On average, 38% of our income goes straight into housing. All of the hard work and savings that went into paying for your home can be paid back to you, and help fund your retirement.
"The reverse mortgage is simply a way, a practical way in which you can use that important house asset, more efficiently to fund retirement. To give people better benefits from what they already have. Not ask them to save more and more." -Professor Robert C. Merton
Discover how a reverse mortgage can help you more efficiently utilize the equity you’ve worked to build up in your house, and fund your retirement without having to save more or sacrifice your way of life. There are several types of reverse mortgages and each one comes with it’s own set of rules, and benefits.
There are a couple of hard and fast rules when it comes to a Reverse mortgage you should be aware of:
- You must be 62 or older to qualify.
- You choose how to receive the funds from your reverse mortgage– fixed monthly amount, line of credit, or a combination of both.
- You must continue living in your home as your primary residence.
- The proceeds of a Reverse Mortgage are tax-free.
How Do I Find a Reverse Mortgage?
LendingTree offers their services, free of charge, to help find a lender that’s right for you. Simply answer a few of questions about your home, and let LendingTree match you with up to 5 lenders. Carefully compare each lender and find the best one for your needs. And the best part is, you still get to live in your home, for as long as you’d like. Calculate how much you could receive every month with LendingTree and their network of Reverse Mortgage lenders.