Motley Fool: For Seniors, Home Can Be an “Unexpected” Source of Money

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Many seniors may experience anxiety when looking at their retirement account balances if they either haven’t accumulated enough while working, or if something happened, requiring the unplanned use of fixed income. In this case, older people may find it helpful to explore sources of funds that some may find unexpected, and one such potential source is the home in which they live.

This is stated in a new article on the financial website Motley Fool, which attempts to show seniors how it might be a good idea to consider certain cash flow alternatives when faced with insufficient retirement income. Health Savings Accounts (HSA) is one such option that is worth exploring, while another is monetizing a hobby or other property in order to start earning additional money, for example, through renting a property or other side jobs.

However, the article states that the home is one potential source of income that many homeowners often overlook.

“There are several ways to squeeze money out of the house,” the article says. “If you are not too attached to this, you may want to consider downsizing. Moving to a smaller home or more accessible area can reduce or even eliminate your monthly mortgage payment upon retirement. This will allow you to spend more of your savings on what you like. You may also want to consider renting out your home if you are planning to retire. This can generate additional income for you every month. However, you should remember to set aside some of this money for taxes. ”

However, for seniors who may not want to rent out their home or keep it for sale altogether, a reverse mortgage may be a viable option for seniors in certain situations, the article says.

“This is only available to seniors aged 62 and over who have a lot of equity capital,” the article explains. “It allows you to borrow against your home’s equity capital in exchange for a lump sum, monthly payments or a line of credit. You do not need to make any payments while you still live in the home, but the full balance is due immediately when you die or move. This is not the right choice for everyone, but if you plan to stay in your home and are not interested in passing it on to your heirs, it could be a good source of retirement income. ”

To illustrate the lack of general awareness, the article does not mention other reverse mortgage options, including a home equity conversion mortgage (HECM) with four purchases (H4P) or certain proprietary reverse mortgage options available from major lenders and brokers.

Read article at the Motley Fool.

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