The volatile economic times due to COVID- 19 are affecting everyone. It is a time to look at all financial planning options available to retirees. Reverse Mortgages are one of those options! This may not be the best time to sell off investments in IRAs or 401Ks when the market has dropped in value. Some financial institutions have even stopped taking Home Equity Line of Credit applications.
The Reverse Mortgage or Home Equity Conversion Mortgage (HECM) line of credit may be a better option. According to an April 8, article published in Kiplinger, Charles Rawl, certified financial planner and principal of Charles W. Rawl & Associates writes:
“When the market experiences a downturn early in your retirement, when you’re no longer contributing to your retirement accounts and you’ve begun to take withdrawals, it can be tough to recover from a major loss,” Rawl writes. “An HECM line of credit can be used as a buffer to help protect against adverse portfolio returns, because retirees can carefully coordinate distributions from their portfolio and their HECM line of credit based on their needs and current market conditions.”