Rich Bonn (RichBonn2818411723)
#178 ranked lender in Texas - 50 contributions
A reverse mortgage is a great tool for retirement planning. Are your parents currently having cash flow shortages, or are they planning just in case. There are a few options for reverse mortgages, and depending on your folk's cash flow needs and their spending/saving habits, they need to be careful to choose the correct option. The first option is a lump sum distribution of cash. This can be a good option if they need a large chunk of money right now and will have adequate cash flow to live through their golden years. This should not be used for investments or to buy annuities. The second option is tenure payments, e.g., your folks will get monthly payments for the rest of their lives. The final option, should they just be planning for potential needs, is a line of credit option. I like this option if your parents are wise savers, because the unused portion of the line of credit will grow each year.It is important that you get the right reverse mortgage product for your folks, it is a great tool to help them enjoy their retirement, however, if you don't, it could become a nightmare for them.