Reverse Mortgage as a Social Security and Retirement Maximization Tool

Get the Most from Social Security and Retirement Investments

When should I take my Social Security?

Man thinking circle LeftThis one decision could impact your retirement by tens of thousands of dollars.

The Social Security Maximization Analysis will provide several filing strategies to get the most out of your SS benefits. Coordinating with other assets and retirement income sources  will allow you to maximize your income even more.

Having a Standby Home Equity Conversion Mortgage (HECM) part of your Social Security and retirement planning gives you the ability to maximize your benefits by filling in income shortfalls when needed. The right planning strategy could give you tens of thousands of dollars more from Social Security. A Standby HECM, commonly known as a standby reverse mortgage, as part of your strategy allows you to:

  • Have cash is available to you in case you need it. With a HECM in place and the line of credit feature, you have not actually borrowed the money, but you have access to it as you need it.
  • For Social Security Planning Strategies you may get more money overall if you (and/or your spouse) delay taking benefits with one of the many strategies available. The HECM can provide extra cash to meet expenses during that period.
  • For Retirement Accounts there will be times when the market takes a downturn. The HECM is there to supplement your distributions so you are not forced to sell positions causing Capital Gains Tax, and you won’t be out of the market when it rebounds.
Don’t lose money by just taking your benefits as soon as you can.

Couple worried figuringA recent study states that seniors are failing to claim $25 billion in Social Security benefits every year. When averaged out, the typical couple mistakenly leaves $120,000 on the table.

As people near the age of retirement they all have the question, “When should I start taking my Social Security benefits?

For people born between 1944 and 1954 the age for full benefit called the Principal Insurance Amount is 66. However, at age 62 one can start taking Social Security and receive an amount that is only 75% of the full benefit, or they could wait to age 70 and receive 132% of the full benefit. That’s a big difference monthly. Proper professional analysis is the best way to understand what the difference could mean to you.

Is you are a married couple, when to and how to take Social Security may be the most important decision they make in retirement. There are many more strategies available. The wrong decision could cost them tens of thousands of dollars.

Couple happy 10aExamples of strategies are:
  • Restricted Application
  • File and Suspend
  • Claim Now and Claim More Later
  • Minimize Taxation of Benefits
  • Coordinate Benefits with Overall Retirement
  • Combinations of the above
  • Protective filing Statement
  • Widow Benefit strategy
  • Divorced Benefit Maximization

When to claim and how to claim can depend on your marital status, life expectancy, financial circumstances, work status and lifestyle objectives . . . and how each of these factors interact with each other.

Here is a couple who gained $100,000 with proper panning

The chart below shows a comparison of strategies for Jan and Paul. You see that the the combination of strategies brought then over $100,000 more in Social Security benefits over their lifetimes. This money would have just been lost without if they hadent taken the time to seek professional help with their planning.

Social Security Comparison Chart

NSSA-logo-SM-fin-2-c-300x177An actual report for individuals or couples is generated by first consulting with a National Social Security Association (NSSA) Certified Adviser for an assessment of your financial and lifestyle situation, your needs, and your goals. Then the information is interred into patented modeling software program that considered all the possible combinations. A report is delivered to you so that you and your adviser can graphically see the choices and the consequences of each choice. Then you are able to make an educated decision about which strategy you believe to be the best for your situation.

Contacting the Social Security Office

Calling room 3The telephone and office Representatives who work for Social Security are prohibited by law from giving you Social Security strategy planning advice. They are trained in helping people file and understand the benefits, but that is as much as they can do. They are not trained or licensed as financial planners, and therefore not qualified to give advise on when you should take your benefits. There are some well meaning Representatives who try to help, but without financial training and experience, it is only luck if their advise gives you the best overall plan to maximize your benefits in coordination with your retirement accounts and other assess.

Stand-by Home Equity Conversion Mortgage is an Important Financial Tool

When you talk with your retirement planner professional, ask them to consider how a Standby Home Equity Conversion Mortgage would augment your retirement income. There are many articles from financial planning authorities on the subject. It has been found to extend distributions, allow larger distributions, provide for Assisted Living Care and accessibility upgrades when needed, enhance the benefit you receive from Social Security, and many more options for your future.

Financial Planning Articles

The Wall Street Journal, Staff Writer

“Standby Reverse Mortgages Can Benefit Retirees, Both Wealthy and Not. HECM Reverse Mortgage can work for well-heeled retirees looking for a buffer to keep them from selling investments at the wrong time, according to academic researchers.”

“Retirement is really about cash flow,” says Martin James, a certified public accountant in Mooresville, Ind. “Even for a person who’s got their mortgage paid off, it’s nice to have a line of credit sitting there. See Article

Bloomberg Personal FinanceBy Carla Fried,

“Using a Standby HECM reverse mortgage supports a 5 percent withdrawal rate, with a 90 percent probability of the money lasting 30 years See Article

Financial Planning Association Publication, Gerald C. Wagner, Ph.D.,

“A reverse mortgage may be considered as another financial planning tool with no stigmas attached to its use. As this paper highlights, reverse mortgages offer many benefits, such as:

  • Tax-free advances that are guaranteed by HUD, and unlike a home equity line of credit cannot be arbitrarily cancelled;
  • The annual tax-free advances can be 3.52 percent (over 37 years) or 3.74 percent (over 30 years) of the home’s current value;
  • The annual portfolio withdrawals can thus be smaller or delayed;
  • The extra portfolio balance will often be greater than the loan balance in 15 years;
  • Depending on the relative values of the home and portfolio, withdrawal rates of 5.0 percent to 6.0 percent can be achieved with over a 90 percent chance of success over 30 years; and
  • In a low yield world, a reverse mortgage supplement has an even greater impact on “spending success.”  See Article

Summit Financial Strategies, Inc., Thomas C. B. Davison, MA, PhD, CFP®,

“A case study used a Standby HECM (reverse mortgage) line of credit to partially replace early Social Security benefits. The study’s Monte Carlo retirement success rate was only 5% if Social Security started at 62 and did not use housing wealth. Using a standby reverse mortgage [HECM] the success rate jumped to 90% by delaying Social Security to age 70. The study was designed to show a positive impact of using a reverse mortgage, and did! Besides adding to the retiree’s available resources, another key is the reverse mortgage draws are tax-free for a retiree in a high tax bracket.”  See Article

Free Consultation with You and Your Adviser
charles AllRMC copy

Charles Guinn, Equity Loan Officer, NSSA Certified

I will be happy to consult with you and your financial planner or retirement adviser about using the Standby HECM to enhance your retirement. Just call, email Or use the form below. There is never an obligation or fee. Click the tab on the Right and complete the form.