Smart Financial Moves in Uncertain Times: Why Liquidating Assets May Not be the Best Way to Generate Cash
Given the current global conditions rapidly impacting our world — the COVID-19 pandemic, political uncertainties, and interest rate cuts to keep the economy on track — it’s no surprise that the financial markets have entered a period of extreme volatility.
For many, these market instabilities create heavy pressure to stem losses by liquidating invested assets, especially for those close to or at retirement age. But according to Bankrate, instability is no reason to completely exit the market. Trying times means making smart choices that can benefit you now and into the future.
When feeling the financial pinch, you may also consider selling your home or taking out a traditional Home Equity Line of Credit to monetize your home’s equity. But there may be another, more flexible way to ride out the bear market and give your investments time to recover: a reverse mortgage.
For homeowners age 60* and older, a reverse mortgage loan can provide a more flexible way to ride out any stock market storms while allowing your investments to grow as the market recovers. In fact, it can offer increased financial security by granting you access to an important and often under-utilized retirement asset: home equity.
How a reverse mortgage works
A reverse mortgage is a valuable financial tool that can be withdrawn as a lump sum, monthly payments or a line of credit that’s there when you need it most.† Just like a traditional home equity line of credit, you can leave it untouched when you don’t need it, but it allows you to be more financially prepared when you do need additional funds — like when invested assets are under-performing. This can be a great way to supplement your retirement income, while you avoid tapping into your savings and investments.
Best of all, it offers a unique growth feature that’s not available with a traditional home equity line of credit. Any unused amounts grow over time — withstanding fluctuations in the market or your home value — giving you access to more funds as time goes on.*
And when it comes to repaying your reverse mortgage, YOU decide whether you want to make monthly mortgage payments — and if so, how much; or make no monthly payment at all. As with any mortgage, you must meet your loan obligations, keeping current with property taxes, insurance, and maintenance.
Leveraging funds you already have
While you have no control over the market, you do have control over your home equity. And tapping into what you’ve built up can often be a more effective financial strategy than liquidating investments to generate cash.
To learn more, call (203) 772-4101 and one of our experienced reverse mortgage specialists will set up a convenient, appointment to see if a reverse mortgage might be right for you.
If you have concerns about stock market volatility and how it may impact your retirement accounts, we encourage you to speak with a trusted financial advisor.
SEE WHAT FUNDS YOU MAY HAVE AVAILABLE
If you have equity in your home and believe you meet the eligibility requirements, a HECM may be the option that could help you retire smart.
