Retirement News with Professor Craig

Retirement News with Professor Craig

The Retirement News blog is dedicated to the financial and physical health and well-being of older Americans. 
Whether you're already in or nearing retirement, you will find important, topical information in the blog to help you make informed decisions on your road to retiring more freely.
As a 25-year veteran in the financial services industry and a certified trainer and teacher, Professor Craig's #1 goal is to help you thrive in retirement with financial peace of mind. 

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A Bad Time to Retire? Maybe Not.
Retirement News, Retirement Planning

A Bad Time to Retire? Maybe Not.

Is it a good time to retire in 2022? That depends on who you ask.

Investments are down, while inflation is high. For the newly retired, the sequence of returns risk is a significant threat, leaving little time to make up for losses and compounded by the decline of income distributions.

But according to Christian Mills (NMLS # 1608842), HECM Specialist at Reverse Mortgage Funding LLC (RMF), today’s older Americans have lived through similar economic conditions and are primed to overcome challenges and retire successfully.

Q: How worried should I be about loss of purchasing power and inflation?

We’ve been through this before. Everyone is focused on interest rates, but if you’ve had a home mortgage in the 1980s, you’ve already experienced double-digit interest rates.

I think it’s exacerbated to some point because we’ve had historically low prices and government intervention with the pandemic — all sorts of different things that we’re now coming out of and have to pay for. We’ve also been in a bull market, one of the longest in history.

But retirees and pre-retirees have lived through this before and can take it. I personally wouldn’t hold off my retirement plans due to inflation because that's just one aspect of the market.

Q: I’m already retired. Are there any steps I should take to reevaluate my retirement plan?

Christian: If you have a financial planner, talk to them. If you don’t have a financial planner, look into getting one. A financial planner is for everyone — nurses, teachers, police officers, anyone with a steady income. You don’t need to be wealthy.

Also, if you own a home, you have a sizeable asset in plain sight. The highest homeowner percentage is Americans aged 65 and above. They control 40% of the home equity that’s out there, almost $11 trillion. Home equity is an asset largely not related to the stock market that you can leverage as part of your strategy by obtaining a reverse mortgage loan.

Q: What’s up must come down. What if my home price drops?

Christian: Let’s say I obtain a reverse mortgage loan on a home and it appraises for $500K. But in the next year, the estimated value comes down to $350K. My reverse mortgage loan appraisal still says it’s $500K and, for purposes of available loan proceeds, that holds. It’s a protection against home depreciation to a degree.

Q: What happens to my reverse mortgage loan if my home price increases?

Christian: In this scenario, if your home value goes up $300K in a few years, the house is worth $800K. And if interest rates are such that it makes financial sense for you to refinance, you can leverage that extra $300k in equity, so now you’re gaining more equity that you can leverage.

Q: Is it worth even re-strategizing my retirement plan now?

Christian: It’s never too late to tweak your savings, investment and retirement strategies. Make a plan, re-evaluate as needed and don’t panic. Conditions are constantly changing.

This content is sponsored by RMF, one of the nation’s leading reverse mortgage lenders. We are dedicated to helping older Americans retire more freely, in the comfort of their own homes. As a result of our commitment to providing an extraordinary and positive customer experience, we have earned a 98% customer satisfaction rating; a 4.5-star / Excellent score on Trustpilot; 4.8 out of 5 stars on LendingTree; and an A+ rating with the Better Business Bureau. Call 888-277-1567 to speak with a licensed reverse mortgage specialist to learn about our retirement financing products and solutions.


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A More Flexible Home Equity Loan

If you’re 62 or older, there is a home equity line of credit option that offers greater financial flexibility than a traditional Home Equity Line of Credit (HELOC). It’s called a Home Equity Conversion Mortgage (HECM) line of credit. 
If you have an existing mortgage or home equity loan you could refinance them with a HECM line of credit and get enhanced benefits, including a flexible payment feature and a line of credit that GROWS when left untouched.
As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and keeping your home in good condition.

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