Page 2 - WSAAG056_Rethink Reverse Brochure for Financial Professionals

What are the qualifications?

The oldest borrower on title must be 62 years of age or
1
older. A non-borrowing spouse may be under 62.

The home must be the borrower’s primary residence.
2
The home equity must exceed 40% in most cases,
3
depending upon the borrower’s age.
How can it be used for
The borrowers will undergo a financial review to ensure retirement security?
4
they are able to comply with the loan terms.
Replace cash reserves

Eliminate monthly mortgage
payments** for borrowers
The Big Picture and help to increase cash

flow
Home equity is a dynamic financial tool that Delay drawing Social

should be discussed with clients to help them Security payments and
pension payouts
reach their retirement goals.
Loan Proceeds are not
considered income and can
Portfolio Survival Risks: Demographic Statistics: be used as a tax-free income
1. Less Structured Assistance Ameriprise Survey 9 supplement*
The shift from defined benefit 47% of respondents plan to use
plans to defined contribution home equity to help fund their Buffer spending of
plans might affect the retirement. investments in a down
distribution of retirement income market
among baby boomers.
-Social Security Administration 5 Cover unexpected gaps in
medical coverage, including
2. Market Volatility and Short- 47% long-term or nursing care
Term Thinking Overreacting to
short-term market volatility can Provide a new way to
endanger long-term results. diversify wealth

3. Longevity About one out of Use a HECM for purchase
every four 65-year-olds today will Boston College Center for to allow a client to purchase
live past age 90, and one out of Retirement Research 10 a new home and save the
10 will live past age 95. 74% of retirees will fall short of residual cash for other needs
-Social Security Administration 6 their income needs at 62 years Enhance financial security
old.
4. Taxes The top marginal tax without affecting some
bracket for many retirees in 2016 benefits such as Social
was 39.6%. Minimizing this tax Security or Medicare
burden can help stretch savings. 74%
-TaxFoundation.org 7
5. Healthcare Approximately 70%
of Americans age 65 or older
will need some type of long-term
care.
-Administration on Aging8