The Five Myths of Reverse Mortgages

Reverse mortgages have entered the public’s consciousness in the last decade, largely because of television advertising by some companies that handle these financial arrangements. However, most people don’t really know very much about reverse mortgages, and there are a number of myths and misunderstandings among people who might benefit from a reverse mortgage. In this report, Kris Wiltfong of Capstone Planning, LLC explains how these mortgages work and who can benefit from them.

Kris Wiltfong

Kris Wiltfong

Reverse mortgages are available to people aged 62 and older who have an equity interest in a home. A reverse mortgage is a way to convert some of that equity into monthly payments. Wiltfong points out that one big benefit of a reverse mortgage is that the funds received are not subject to tax. The concern about taxation of the money received is a common misconception.

Another common misconception is that, when you get a reverse mortgage, you no longer own your home. Of course, there will be a lien on the home to secure the payments, but the ownership of home doesn’t change. Naturally, if you are receiving the funds, you need to keep up your homeowner’s insurance and pay the property taxes, as always.

Contrary to what some people think, there are not large out-of-pocket expenses associated with reverse mortgages. The costs are comparable to those for any other mortgage. Another misconception is that reverse mortgages are only for people who are in serious financial straits. Wiltfong explains that anyone who wants to add some money to their retirement might want to consider a reverse mortgage.

If this sounds good, you can contact Capstone Planning at 386-202-4498 or go the Capstone Planning website.

Kris Wiltfong is a Risk Specialist at Capstone Planning, LLC of Palm Coast, Florida. The company, founded in 1997, focuses on retirement planning. One of the company’s primary focuses is risk management. Retirement News Today is a featured network of Sequence Media Group.

When Should You Start Your Social Security Benefits? Frank Pizzoferrato Explains

The Social Security Administration allows people to begin taking their social security benefits at age 62. On the other hand, the longer the delay in starting that monthly benefit (up to age 70), the larger the monthly check will be. That leads to the question, when to start? Frank Pizzoferrato, CEP explains what considerations are involved and how to make the decision in this report.

Frank Pizzoferrato

Frank Pizzoferrato

Pizzoferrato says that the primary consideration is income when someone is trying to decide when to start receiving benefits. “If you need your social security check . . . then you should take it.” Of course, anyone facing this problem should consider other funds available to provide income. For example, money in a bank account will generate very little interest. One move would be to use the bank funds to supplement income and let the social security payments wait—and increase.

Some people start their benefits early out of a concern that the Social Security Administration will run out of funds. Pizzoferrato says that this is not a totally groundless concern. The trustees of the fund have said that, without any further funds than what are presently coming in, social security is fully funded until 2033. In other words, without any changes, everyone’s check will remain the same. After 2033, the fund would have 77 cents for every dollar of benefits.

A tougher question is figuring out how to take social security benefits so as to maximize returns. Pizzoferrato points out that “there are literally hundreds of different combinations of when to take social security” for a claimant and spouse. Oak Harvest, Pizzoferrato’s company, provides an analysis for clients based on a client’s four page social security statement. The analysis will explain the best time and what the benefit amounts will be.

Pizzoferrato explains that, if you take social security at age 62, you are giving up a 25% deduction compared to what you would receive at your full retirement age. What that means is that, if you delay until retirement age, your social security benefit increases by about 6% per year. “If you’re not making 6% on your money in the bank,” you may want to use those funds to supplement your income and let your social security benefits increase.

Pizzoferrato wants everyone to understand that it is possible to keep working and still receive social security. The key to this is your full retirement age. If you are working and haven’t reached your full retirement age, the Social Security Administration will hold back some of your benefits while you are working. However, the withheld amounts will be reimbursed after full retirement age is reached.

People need to also understand that social security employees are not allowed to provide advice, and there are hundreds of possible choices as to when and how to claim social security benefits. Pizzoferrato suggests that people need help from an adviser like Oak Harvest Retirement Group.

Frank Pizzoferrato is a Certified Estate Planner at Oak Harvest Retirement Group in Houston, Texas. Oak Harvest is a group of Certified Financial Planners, Estate Planners and Retirement Specialists. They specialize in Income Planning, Estate Planning, Retirement Planning, Social Security Analysis, Business Planning, Annuities, Life Insurance, Long Term Care Insurance and their own Retirement Defense System. Retirement News Today is a featured network of Sequence Media Group.