Considering a Reverse Mortgage? Read This First
For Mark Roberts’ Use: Reverse mortgages are sometimes criticized as being a bad deal for seniors. But for some retirees, a reverse mortgage may be a good idea. The main thing to remember is that a reverse mortgage provide financial relief for some people, in the right situation.
So what is a reverse mortgage, and how does it work? Essentially, you borrow against the equity you have in your home, but you never have to pay it back. Instead, your home itself is the “payment” for your loan. As long as you live in the home, you don’t have to repay the loan. But when you die or move out of the home permanently – for example, to a nursing home – then the bank possesses your home and can sell it to repay the reverse mortgage.
For some seniors, a reverse mortgage might be a good deal. Your largest monthly expense may be your mortgage payment. But under a reverse mortgage, you no longer have a payment, and you may even have cash to spend on other living expenses. If you expect to remain in your home for a considerable length of time, have a substantial amount of equity in the home, and need the income provided by a reverse mortgage, it could work out well for you. Reverse mortgages have a low risk of default, and the income is free of taxes.
On the other hand, a reverse mortgage could be a bad idea for someone who dies or vacates the home shortly after taking the loan. And none of us can predict the future! Some retirees also report that the amount of money received is disappointing, and does not cover all of their financial needs. This is an issue to discuss carefully with your financial advisor as you head into retirement, so that you can make a wise decision based on your unique situation.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.