One of the things I often hear as something that keeps my clients up at night is do they have enough money to retire or if already retired, do they have enough money to last over their life time?
Just twenty years ago it was normal to retire at 65 and receive social security and live on savings because the average life expectancy after age 65 was only 5-7 years for a male and 10-12 years for a female. In this case, even a few hundred thousand dollars might have been enough.
Today’s life expectancies for most people are easily in their eighties and nineties. This means that you will have to have 20-25+ years of savings and other income to live on. For many, they simply do not have enough to cover their golden years.
One of the strategies most often used in recent past years is a reverse mortgage. Simply stated, you take a mortgage out on the value of your home as a lump sum and you do not need to make mortgage payments – the lender in essence will take your home when you and your spouse are deceased. In the past 2-3 years, this has become very difficult to make happen due to extreme changes in the lending community that have significantly more restrictions.
Another strategy used is maximization of social security benefits. This was sometimes used in connection with a reverse mortgage or existing savings to delay taking social security benefits at age 62 until later years when monthly benefits received are much higher. However, many people I consult with have already missed the boat on this one.
A more recent strategy is selling a portion or all of your life insurance policy. This can accomplish additional funds to live on or perhaps even fund long-term care policies. The older you are the higher the premiums cost and this is one way of eliminating the premiums and getting a large amount of money. There are companies that purchase your life insurance and give you a portion up front for you to live on. These companies continue to pay the premiums on your behalf and become the beneficiaries upon death. It is possible for you to still leave your heirs as one of the beneficiaries in exchange for a reduced up-front payment.
Consider the benefits of no longer paying expensive life insurance premiums and get paid for your policies to get financial relief!