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Reverse mortgages can maintain cash flow in retirement 2010-02-03 Cash flow is king in retirement, CBS Money Watch reported last week, and retirees with an income shortfall may want to turn to a reverse mortgage. The instruments are available to people older than 62 with a significant proportion of equity in their homes. Because a large home equity position is necessary for a reverse mortgage, some near-retirees or retirees may want to work on paying off their mortgage. Money Watch reported that the number of households aged 55 to 64 with mortgage debt has increased steadily since the 1980s. Few retirees will want the albatross of mortgage payments in retirement, though, and paying off mortgage debt can be smart. One of the best reasons to have a mortgage is the tax deduction that accompanies it - but retirees "may no longer have enough deductions to itemize," Money Watch notes. Paying off high-interest debt should be the primary goal of every near-retiree, the financial website suggested. Credit card debt is likely to have the highest interest rates and should be the target of any income-conscious older person. "Reducing debt is a dollar-for-dollar improvement in your financial condition," financial planner Frank Boucher said to Money Watch.  |
