Reverse mortgage retirement plan?

[Anonymous]

I’m a 48 years, single, no kids, never married, in a HCOL city. For retirement I currently have 100k in savings, my condo is paid off ($450k), and will inherit about 1 million. I earn about 100k a year but my job is very physical and once I hit my 50’s ageism will make things hard for me. I’m wondering if a reverse mortgage would be a good retirement plan for someone like me, who doesn’t have heirs? Or would you sell and just go rent in North Carolina or something? I feel like I won’t be able to get hired once I’m in my 60’s, so need to plan to retire about 60. Wait for social security until 67. I’m used to living frugally because I’m one of the DCUM poors. Do you think I’ll have enough? Or do I need to find a way to keep working in my 60’s? It’s so hard doing it all alone.

[Anonymous]

How much is your annual expenditure? How much is SS at 62 and 67? When do you expect 1 mil?

[Anonymous]

There's still time to save. You potentially have 19 more years to work and save. If you max out your retirement now, you will have $1 million, on top of the $1million you will inherit, on top of social security. That's easily $100K+ a year and a paid off home. And no reverse mortgage.

[Anonymous]

Is the 1M for sure? If it's from parent/s what is their plan for elder care? If they have to pay for elder care with that money then it could be reduced.

As stated already, you have time to save, and you should max out savings plan and extra if possible.

Figure out how much you truly spend, including healthcare since you won't be eligible until you're 65, meaning you will have to pay for it yourself.

And set up an account with the IRS to determine what you will make in SS at the different ages.

[Anonymous]

Also, come up with ALL your expenses, find out your SS income, then repost all the info in the Money and Finance forum. You'll get more help there.

[Anonymous]

Reverse mortgage means you are giving a lot of it away. Why not rent similar apartment if you must live there. Invest the money for income.
You would have even more if you moved to lower cost of living. You investment income, SS, work part time, inheritance, and savings is plenty. You will want to work part time or you get bored.
It's not the income, it's what you do with the money that's left over and how little you spend.

[Anonymous]

The thing with a reverse mortgage is, depending on the terms and when you take it out, you might outlive it. I would sell invest the money, find a nice cheap one BR rental in a nice liveable town that you like.

[Anonymous]

I would sell and move somewhere cheap.

[Anonymous]

Anonymous wrote:I would sell and move somewhere cheap.

Problem with somewhere cheap is OP might not like it. Cheap places are.imexpensive for a reason.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I would sell and move somewhere cheap.

Problem with somewhere cheap is OP might not like it. Cheap places are.imexpensive for a reason.

The beauty of renting is you move if you don't like it.

[Anonymous]

Im confused. if you home is paid off, what's the issue?

[Anonymous]

Op you can’t answer this until you understand what income and expenses will be like as well as what/where you want to live after retirement.

there are lots of retirement calculators. I like new life but there are a number that can help you drill down into how much you will need. Do you have a retirement account or just “savings”? Rule of thumb is that you can draw about 4%/year of retirement accounts so if you had 1 m at retirement that would be 40k/year plus social security. However you also need to factor in taxes, Medicare supplement etc.

The other big question is how secure that inheritance actually is. My mother is in early stages of Alzheimer’s but very healthy. We are looking at her finances because her care could very well cost more than a million easily if she makes it 10 years which is likely. (She hates the idea and would rather off herself or so she says as she wanted that money for grandkids but what are you gonna do?). That also raises the question of your long term care. Maybe look into a CCRC situation….

[Anonymous]

Anonymous wrote:Im confused. if you home is paid off, what's the issue?

OP enjoys eating.

[Anonymous]

OP, I imagine it is scary to be in your situation, thinking about aging alone and trying to make the best choices for yourself.

As someone who is saddled with all kinds of people to care for, I encourage you to look at the opportunity you have here. You could spend the next few years researching and visiting some places where you might enjoy living out your life, where you could create or find a community and really enjoy your life. You didn't say that you love living in your current high cost city so I'm wondering if you love it there and feel like you have your "people" so to speak. If that's not the case, maybe you could look forward to a new adventure. 48 is really so young and you have so much of your life ahead of you. Maybe you could find a lower paying job that is less physically demanding in a new location. Maybe you could increase your quality of life. The world is your oyster.

Not trying to do anything here but encourage you to think outside the box with this opportunity to live your one best life.

[Anonymous]

There is almost always a better option than a reverse mortgage. For anyone who ages, an assisted living arrangement is the better option; the primary way to afford an assisted living arrangement in which you want to live will come from the equity in your home. Through a reverse mortgage, you meaningfully give up that equity.