More About Retirement

The weather here on Long Island was almost spring-like yesterday, so I went to the park and walked around for the first time in months.  I came upon two elderly gentlemen sitting on a bench overlooking the lake.  One of the men said to his friend that his wife asked him this morning what he was going to do today.  He replied: “Nothing.”  She said, “That’s what you did yesterday.”  He answered: “Yup, but I didn’t finish.”

Okay, okay, that didn’t really happen, but some of us look forward to retirement so we can do nothing if that’s what we decide to do on a given day.  Most of us would go batty if we had to live the rest of our lives doing nothing, but doing something usually requires some money.  Those of you who have one of those incredible union pensions I’ve been reading about the last few weeks might want to go back to packing for your late winter trip to a warmer clime.  For the rest of us, let’s talk about a few retirement ideas.

I’m not an expert retirement planner (believe me) and I have made a few wrong turns in my financial life.  One problem was that I was never going to get old.  Wrong.  Second problem was some of that IRA money was needed for a juicy investment.  Bad choice.  Then, my 401k shrunk to a 201k back in 2008.  Yikes.  I’m in my early 60’s and the retirement piggy bank looks like that picture above.  Now what?

I checked the lottery numbers this morning, and – sigh – I’ll be at work tomorrow morning.  The Geico radio advertisement just informed me there is no money tree and no pot of gold at the end of the rainbow.  Social Security should be there in a couple of years when I turn 66, but that’s not nearly enough monthly income on which to retire.  As some of you have already guessed, I’m thinking: HECM Reverse Mortgage with Tenure Payments for Life.  Tax free monthly payments wired into your bank account for the rest of your life – no matter what!  You can’t outlive these payments – as long as you continue to reside in your home, those tenure payments from the bank will arrive in your account on the same day every month.  The interest rate on this Reverse Mortgage right now is around 2.5% and you only owe the interest on the amount of principal you’ve actually received.  And, you keep the ownership of your home with no monthly payments to the bank.

I know, you want to know how much you are eligible to receive right?  I’ve thought of that too, and I have a free, Reverse Mortgage calculator here, available for you to use.  Just enter some simple information and see how much closer to retirement you can be.  As for me, I’m going for a walk in the park with a big weight off my shoulders.

Finally, it pays to get old.

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Another Survey – Retirement Problems

As is often the case, the survey tells us what we already know – many people around the country have little or no retirement savings.  It’s even worse among Baby Boomers who are at or near retirement age; fully 25% of those surveyed indicate they have nothing saved for retirement, according to a survey recently conducted by The Harris Poll.  In many cases, they had to liquidate savings to pay expenses during this recession, or to survive months of  unemployment. 

Younger adults, of course, have time to try to reconstitute their 401k’s and their IRA accounts; but the Boomers face fewer choices.  One option which many have resigned themselves to pursue is simply to continue working.  Unlike the Federal government, when we run out of money, we can’t just print more of it and keep spending.  No, we must keep working, and cut our spending as much as possible…or find other sources of income – legal sources, of course. 

As you may have guessed, one of the solutions of which I am a proponent is the HECM Reverse Mortgage.  If you own your home and are still buried under heavy mortgage payments, a Reverse Mortgage can provide relief by paying off the existing mortgage freeing up money for food, clothing, heating bills, etc.  If you own your home and have no mortgage, you might consider a Reverse Mortgage set up to pay you a fixed amount of money each month for as long as you continue to live in the home.  Hopefully, along with your Social Security, this will provide the comfortable lifestyle you have earned.  As always, feel free to ask questions in the comment section….

(Hat tip: Pat Whitlock)

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