After years of saving and careful planning, seniors finally get to enjoy what
they have earned. However, financial planning doesn’t stop in these years
because important budget adjustments need to be made for issues such as rising
health care costs and fixed incomes.
As part of its ongoing mission to empower borrowers, MORTGAGEPIG offers the following tips to help seniors manage
financial obligations during retirement.
1. Find smart ways to utilize a lot of
home equity. A home
can be the most important financial resource for seniors. Many people may find
they have little cash but own a very valuable home. Evaluate your home’s
equity and if rates are low, there can be opportunities to make investments
that could earn you more than you would be paying in interest and fees.
2. Continue to budget and plan effectively. Budgeting and
planning are still critical functions to maintain the lifestyle you want. Unexpected
issues can arise where you may be forced to allocate additional funds that
you may not have planned on, such as an immediate health expense. By continuing
to plan and save for emergencies or unexpected situations, you will be safe
from dramatic changes to your budget.
3. Consider a reverse mortgage to turn home equity into cash. Reverse mortgages
allow you to borrow against your home and turn your equity into cash. With
this type of mortgage, you receive regular payments from the lender without
making loan payments in return. Before deciding on a reverse mortgage, you
need to understand that the costs are often high, and frequently the amount
you can borrow is significantly lower than your home’s value.
4. Consider moving into a smaller home to create more cash.
It is the easiest advice and often the most effective. If you are struggling
with how to juggle a fixed income, this could be a great way to supplement
it. Additionally, it could free up money to continue to save or spend as you
For free Reverse Mortgage Counseling.