The Math Behind a Reverse Mortgage
Video Transcript:
If you’re considering a reverse mortgage, but not sure it’s right for you, let’s do some math to help make your decision easier.
How much you can borrow is based on the age of the youngest borrower, the value of your home and the expected interest rate. You’re borrowing approximately 40%, while 100% of the value of your home is appreciating at 4% a year on average. That means there will be money left over after the loan is paid.
Let’s look at an example of how a typical reverse mortgage plays out. Jane is a 70-year-old single woman with a home value of $500,000 that’s free and clear. She wants to borrow $1,000 a month – or $12,000 a year – for 20 years. She’ll use the money to pay for long term care, property taxes, and Homeowners Insurance premiums. After year ten, she is projected to have $557, 000 in equity and after year 20 $531,584.
To find out what your numbers would look like, reach out today.
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Whiteboard Videos for Reverse Mortgage, Financial Advisors, Loan Officers, and Medicare Insurance.
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Financial Advisors – What is an Annuity?
Our Whiteboard Video Transcript:
What are annuities and how do they work? Annuities are both a savings and an income investment that pays out over a period of time. It’s actually a stream of income that may be designed so that you can’t outlive it. An annuity is a flexible insurance contract that allows retirement savings to grow income tax deferred and then payout to you in a lump sum, income for life, or income for a certain period of time.
There are two basic types: Fixed and Variable. The Fixed Annuity earns a set yield and payout set by the contract. The Variable Annuity is invested in stocks and bonds. The growth value and potential income stream will depend on the investment returns and losses could occur. In both annuities the growth is income tax deferred and the contract terms control growth and income. In today’s market there has been a blending in the qualities of these two kinds of annuities to generate the best return for investors.
There are a lot of choices, and your personal situation needs to be considered. We can help you develop a plan to meet your specific needs towards a comfortable retirement, so please give us a call today.
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Reverse Mortgages versus Traditional Mortgages
One of the most frequently asked questions about reverse mortgages is, “How does it differ from a traditional mortgage?”
With a traditional mortgage, you make your payments each month, slowly chipping away at the loan balance a little bit at a time. But with a reverse mortgage, monthly principal and interest payments are not required, so the balance goes up over time.
To better understand how a reverse mortgage works, let’s look at a typical scenario. Bob takes out a reverse mortgage for 50% or less of the value of his home, and in the process gains home appreciation averaging 3-4%. That means that his home equity is increasing … even though he’s not making monthly principal and interest payments. The value of his home may be growing faster than his loan balance… turning home equity into retirement cash flow for Bob to use to help fund his retirement while still allowing him to leave a family legacy to his heirs. He can use those funds to renovate his home, fund a grandchild’s education, purchase a new car, or improve his retirement lifestyle.
To find out more about how a reverse mortgage can benefit you and your family, call us today.
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Medicare Annual Enrollment Period (AEP)
When is the Medicare Annual Enrollment Period… and why is it important to you? The Medicare Annual Enrollment period runs from October 15th through December 7th each year. The Annual Enrollment Period is only extended beyond December 7th when FEMA declares an emergency or a major disaster in your area that would make sign up difficult.
Each September – before the AEP period begins – you’ll receive an Annual Notice of Change letter detailing the changes in your coverage for the following year. Being aware of the Annual Enrollment window is important, because it gives you the opportunity to reevaluate your current coverage and decide whether to change it. Any changes you make during the AEP go into effect on January 1st of the following year.
For example, you can switch from Original Medicare to a Medicare Advantage program that may provide additional coverage that Original Medicare does not. You also have the option to switch from one Medicare Advantage program to another for increased benefits. If Original Medicare coverage changes, you can even switch back to Original Medicare, or just update your Part D drug plan to take advantage of price changes in prescription drugs.
As you can see, there’s a lot to know about Medicare Annual Enrollment. Let us help you with your important Medicare decisions. Call to speak to a licensed insurance agent.
Whiteboard Videos for Reverse Mortgage, Financial Advisors, Loan Officers, and Medicare Insurance.
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How to Take Care of Your Spouse If Something Should Happen to You
If you’re like most people, most of the time, you focus your financial efforts on maximizing your current income. But it’s also important to plan ahead for the benefit of your spouse if you should pass away. Here are some tips for how to do that.
First, carefully consider joint vs. single life payouts from pension and investment distributions. Next, consider waiting to take Social Security until age 70 instead of age 62. This could increase your survivor benefit by 76%.
As life situations may change, update your beneficiary designations. These designations will take precedence over what’s written in your will or trust, so it’s important to keep these current. Investments like annuities have a guaranteed lifetime benefit. These can be a great way to ensure that your spouse is taken care of, even after you’re gone.
Be sure to keep your wills and trusts up to date and your assets properly titled. And keep your spouse fully informed about all financial details. We can help you make sure that your spouse is taken care of. Please give us a call today.
Whiteboard Videos for Reverse Mortgage, Financial Advisors, Loan Officers, and Medicare Insurance.
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Hear testimonial from our client, Dan Williams!
This Testimonial reveals how Dan has used his whiteboard videos to spur discussions and expand his reach!
Whiteboard Videos for Reverse Mortgage, Financial Advisors, Loan Officers, and Medicare Insurance.
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Reverse Mortgages- The Sandwich Generation
Video Transcript:
If you’re part of the “Sandwich Generation”, meaning your parents are over 65 and you’re raising your own children, you face a difficult choice. You’re trying to balance the funding needs of your own family against the worry that your parents’ savings won’t be enough to cover their living or health care expenses in retirement. Traditional financial planning would suggest that you draw down assets from your portfolio to help cover these costs… putting the funding of your own retirement at risk.
A Reverse Mortgage Specialist can show you – and your financial advisor – how a reverse mortgage can be a better option for you and your family. A reverse mortgage can provide the additional cash flow in retirement that aging parents need by accessing the equity in their home. It eliminates monthly mortgage payments and replaces them with a lump sum or monthly payout, a line of credit or some combination… and your parents don’t have to sell their home. Your parents can use this extra cash to age in place more comfortably or to help cover the high cost of medical care.
This also leaves your portfolio intact… ready to meet your own retirement needs. To find out more about the reverse mortgage option for aging “Sandwich Generation” parents, contact us today.
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How Money Savvy are You? – For Women
You don’t have to be a math whiz or know how to pick stocks to become savvy about money. Being savvy about money is more about being engaged, understanding what you want and having a plan designed for your life. And it all starts with your experience with your advisor. Take this quiz right now to rate your experience with the financial advisor in your life. I’ll read 5 questions, and you write down a score of 1 to 5, with 1 being non-existent, and 5 being absolutely yes. Total the points to determine if you are getting what you need and want from your advisor:
Number one: I understand the purpose for my money and feel totally confident about my progress.
Number two: I am financially organized and know what I have and how it will support me.
Number three: I enjoy meeting with my advisor and am constantly learning more about my money.
Number four: I have a financial plan that is designed around my life and helps me track my progress.
Number five: My financial knowledge has increased measurably since working with my advisor.
If you scored a 25, congratulations! You are fully engaged in planning for your financial life. If you scored less than 25, perhaps it’s time you engaged in a new experience. Our mission is to help every woman become fully engaged in her financial affairs, understanding the process and enjoying her journey to financial confidence.
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Diversification – Protect your Portfolio
Just like the old warning against putting all of your eggs in one basket, if you put all your money in one company stock and it dropped like a rock, you’d lose everything. Diversification can help protect your portfolio from that scenario. Diversification is the practice of spreading your money among different investments to reduce your risk of losses. A portfolio should be diversified at two levels; both between asset categories, such as stocks, bonds and cash; and within those asset categories. Ideally, if one investment is losing money, another will be making gains. To diversity between asset categories with stocks holdings, for example, you’d invest in a wide variety of industry sectors, such as energy, technology, financials, health care and utilities. Then you would diversify again, within those sectors. There are many ways to diversify within sectors: invest by company, such as Google or Apple in the tech sector; by geographical market, like domestic or international or by company size, large-cap, mid-cap or small-cap. Many people choose to diversify their portfolios with mutual funds or Exchange Traded Funds. These funds hold shares in a variety of companies, making it easier for investors to own a small portion of many investments. For more information on how to achieve a diversified portfolio, give us a call or stop by our website today!
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Group Health Insurance – Video Marketing for Financial Advisors
Link to Video on YouTube Channel:
Video Transcript:
Choosing the right Group Health Insurance Plan can help reduce costs for employers and employees. For employers, providing a Group Health Plan saves money because it spreads risk across a larger group, reduces premiums, and provides some tax incentives. Group Health Plans benefit employees by providing coverage at a lower cost than individual policies, because the employer covers part of the premium cost.
Two typical types of Group Health Plans are Health Maintenance Organization (or HMO) plans and Preferred Provider Organization (or PPO) plans. HMO plans often offer lower premiums, but you’re required to choose care from an in-network provider. With a PPO Plan, you can choose any doctor, but you’ll pay more for out-of-network care.
Helping employees stay healthy boosts company productivity by reducing sick time and can help recruit and retain top people. In fact, a Forbes Advisor 2022 survey showed that health coverage is a great influence on what jobs people select. And it can help a company retain—or lose—employees: 8% of respondents with health insurance through work said they left a job that they liked because they wanted better health coverage.
Need help choosing the right Group Health Plan for your business? Call us for a no obligation consultation today.
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Financial Advisors,
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JILL ADDISON
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JAMES STEWART, CFP®
Co-Creator, Turnkey Video System
Certified Financial Planner ® (30+ years)
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