Just how prepared are you for retirement and do you really have enough savings set aside to make it comfortably through your golden years? While planning and saving early on is the key, the reality is that inflation, unforeseeable living expenses and medical expenses and hidden bills can really set you back.
According to recent estimates, experts have said that just two out of three adults are prepared for retirement and will not retire without working at least a part time job. But if you own your own home, you may be able to consider an alternative that sets you up more cozily for retirement. It's called an HECM reverse mortgage, and here are four reasons it may make sense as part of your retirement plan.
Not Enough Saved For Retirement
If you do not have enough money saved for retirement, you are not alone. Recent studies have found that two-thirds of Americans are shy of meeting their financial goals for retirement. The good news is that even if you lack these funds, a reverse mortgage can enable you to access the equity in your home, if need be, to cover any related expenses in the future.
Unforeseeable Medical Bills
Newer reports have found that the average retiree faces between $25k and $50k in medical bills over their lifetime. These are debts that Medicare usually doesn't cover, even if you have supplemental insurance. Knowing that you have access to extra funds from your home's equity, for just in case, is a comforting notion when it comes to your well-being.
Unwanted High Interest Debt
What about credit card debt and other forms of high interest debt? Over a lifetime, these can really add up. As the interest and fees get tacked on, the debt grows and becomes harder to pay off. After several decades of accumulating this debt, a reverse mortgage at a locked and low interest rate can provide peace of mind for the future.
Peace Of Mind With A Line Of Credit
Finally, there is a line of credit option with a reverse mortgage. This option lets you borrow only as you need it. Your accumulated debt accrues at a low interest rate and is paid off from the sale of your home after your passing. You can access it when and as you need fit. But just knowing that it's there just in case can mean a world of difference for your retirement planning.