How Much Should A 46 Old Person Saved For Retirement The Best Strategies For Your Retirement to Protect Your Wealth Through the Worst Economy Ever

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The Best Strategies For Your Retirement to Protect Your Wealth Through the Worst Economy Ever

First, let’s look at where we’ve been in the past and then look into the future and get some strategies you can implement to protect your assets for the future. If you are over 80 years old, you are one of the few people who know what happened in detail when the great depression hit even if you would have been a child at the time, you must have heard stories from your mother and father or relatives. .

The depression hit in 1929 when the entire economy of the United States collapsed, causing many rich people and some not so rich people to end their lives because they had no protection in place. The key to surviving is to have a fail safe program in place that protects against total failure. The difference between 1929 and today is that every aspect of today’s economic meltdown is worldwide. The problems; there are hundreds of millions more people in the world then there were then. Most people today do not understand or think that most of their wealth is in the biggest investment they have ever made and that is their home.

Yes, the house is and was for most people the biggest investment of their life! The house in the United States and the equity that is just sitting around untapped is estimated at more than 2 trillion dollars; only for people over 62 and growing faster than any other segment in the country today. This is true even though home values ​​around the country have declined over the past 5 years or so.

You see that most people do not understand the fact that equity in your home does not mean that you are rich, unless it works for you to solve a problem for you. If you have $200,000 or more equity in your home or even much less you are what is called House Rich and Cash Poor! Realize that having a home that is yours and owning it just means that you have no payments, it does not mean that your equity can do anything for you unless you have the money to make things happen and increase your cash flow. cash or keep your life for many years without stress. Here is the problem, you have what is called a net worth of $200,000 or what ever, but if a situation in your life appears where you don’t have the money to solve the problem, you still have a net worth but you can’t don’t spend to solve your problem or invest to increase your wealth.

So now let’s look at some strategies!

Strategy #1

Increase Your Tax Free Income

To maintain a standard of living, some older homeowners start converting home equity into monthly income. This approach is a relatively new concept that gained momentum with the development of reverse mortgages. Financial professionals are also beginning to explore different options for using home equity to increase and annuitized income. The foundation for retirement security is traditionally compared to a three-legged stool consisting of savings, pensions and Social Security.

Recent financial trends suggest that this conventional approach is becoming less effective. The savings rate among Americans has declined significantly since the 1980s — reaching its lowest level in 2004 since the Great Depression — though it has recently turned upward. Compounding these cash shortages is the decline of defined benefit plans, which leaves many Americans facing a future with less guaranteed retirement income.

As the cost of living continues to rise, many older Americans are finding it difficult to make ends meet. Researchers estimate that nearly 78% of all families of older adults do not have sufficient resources to support their retirement years. Baby Boomers are also concerned about being able to maintain their standard of living as they age. Older workers who expect inadequate retirement income, or a less reliable source of income such as a defined benefit plan, are more likely to plan to use home equity to pay for retirement expenses .

Option One

Increase the monthly income of annuitized pension is to defer Social Security payments. Retirees receive a reduced monthly benefit at age 62 and progressively larger benefits for each month they defer benefits until age 70. Older widows and widowers may see the greatest benefit, as deferral will increase the value expected of their monthly survivor benefits. To maximize their monthly payments, like those of their spouses and other dependents, people close to retirement could continue to work. However, this option can be difficult for workers in physically demanding occupations, and those who are limited by health problems. To help workers who anticipate a long life, and who will retire before age 70, some financial professionals recommend a term home equity loan or reverse mortgage to help pay for the expenses of each day for a few years until they are eligible for maximum Social Security benefits. .

Option Two

Another option for older homeowners to secure retirement income would be to buy a “longevity” annuity with their savings, and tap small amounts of home equity to cover financial gaps until they begin to receive their annuity payments. Longevity annuities require a smaller investment than an immediate annuity because payments usually don’t begin until age 80 or 85. This approach could be attractive to older Americans who worry that buying an immediate annuity will leave them with little money to pay for unexpected expenses or. to leave a legacy. Consumers should carefully examine the fees associated with longevity annuities, as they can be expensive.

 Option three

This option is the one that reduces stress and is also the safest option of the three, it requires very little on your part and is the easiest to carry out. By using the equity in your home and not using available salvage or another tool you can have the best of all worlds. Let’s look at a few decades and see what has become available that had never been available before for many people especially seniors over the age of 62. When people age, they face a growing possibility that a problem of expensive health could disrupt their family budgets. When they can’t make their monthly loan payments, they can lose their homes.

A recent study found that at the end of 2007, more than 684,000 homeowners age 50 and older were delinquent in mortgage payments or in foreclosure. A reverse mortgage allows older homeowners to defer monthly mortgage payments on a conventional home loan. Borrowers (or their heirs) do not have to repay the loan until the last borrower dies, moves away permanently, or is vacant for a period of 12 months. About 46% of reverse mortgage borrowers surveyed by the organizations paid off their regular mortgage this way. Some are transferring their existing home debt to meet the requirement that a reverse mortgage be in first lien position. Anecdotal evidence suggests that an increasing number of older homeowners are taking out this type of loan specifically to avoid the need to make monthly mortgage payments.

Using home equity to manage debt became popular after the Tax Reform Act of 1986 eliminated the deduction for interest on credit cards, auto loans, and most share of other types of consumer debt while preserving tax deductions for certain home loans. Since then, loans have moved from payment plans to mortgages and home equity loans to pay for major purchases like cars and appliances. Easy access to credit has also provided lower income families with greater liquidity to purchase the goods and services they need to continue living at home.

Using home equity to manage consumer debt can enhance a person’s standard of living. But if this resource is not used wisely, it can also be a source of financial insecurity. Older homeowners often take on considerable debt without considering the potential impact of these loans on their long-term retirement security. Using a reverse mortgage to defer debt payments can also be risky. Borrowers who use loan funds before their retirement may have little home equity later in life. Borrowers continue to accumulate interest payments on the loan balance as long as they stay in their home. Those who continue to live in their home for many years may find that they have little or no home equity after paying off the loan.

This could be problematic for older adults who need to move into an assisted living facility or other supportive setting as they become frail and in need of care. Without sufficient funds, some may need to turn to Medicaid to pay for long-term care.

Having the reverse mortgage in place and the installation I a way that takes into consideration the things that may or may not be in the future is what is a reverse mortgage. The flexibility in the mortgage offers you the option unlike any other part. Control the amounts and timing and you can change them as the situation changes. In addition; it gives you the freedom to decide what, when and how you can receive income or payments and, unlike most programs, depending on how you choose to receive, you can never outlive the money, no matter what happens in the future. You will never in your life have to pay anything back everything happens when you are gone and no longer live in your home as your primary residence.

The reverse mortgage is so versatile in every way from the choice of how the interest charges accumulate over time, meaning an adjustable fixed rate. You can also choose how you will receive the money either all at once or in a specific time period or for life. Not to mention that you can also have the amount that is reserved for the future grow over time. This option is the built-in Equity Line of Credit! This part is only available when using the adjustable rate program, but it is the one that really gives the most flexibility for a real advantage against inflation.

Any financial expert worth a grain of salt will agree that in our final years we need the maximum amount of security coupled with the maximum amount of flexibility and this is what the reverse mortgage can and will do for millions of seniors So don’t look at the reverse mortgage as another mortgage, look at it has the ultimate program that can do more things to protect your future and provide today at the same time all it needs is to be installed properly from the set. and then adjust as your personal situation changes and there is one thing you can count on that your financial situation will change without a doubt. It’s not IF it’s when.

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