Jane Bryant Quinn’s New Thinking on Making Your Money Last - Reverse Mortgage

Author and esteemed financial journalist Jane Bryant Quinn explains why she changed her mind about reverse mortgages and feels better about recommending them as a retirement planning option with Next Avenue editor Rich Eisenberg. Quinn also discusses newly revised book, How to Make Your Money Last: The Indispensable Retirement Guide, and how she and her husband planned for their own retirement. 

And you’ve changed your mind about reverse mortgages. You like them more, for some people who are at least sixty-two — the minimum age to qualify —than you once did, right?

Yes, I’m feeling better about them. Two things have happened.

In the past, one of the problems with reverse mortgages was that people who almost ran out of money took them and the reverse mortgage income wasn’t enough to pay their bills and keep up their house. So, they’d run out of money and be at the risk of foreclosure.

The law changed. Now, if you apply for a reverse mortgage and the lender’s analysis is that you might be unable to pay your bills after ten or fifteen years, you don’t get all the money to spend. The lender keeps some aside to pay for the property taxes and keep the house going. So, there are fewer risks for people who don’t have much money.

And for people with plenty of money, you might take a reverse mortgage at sixty-two, in the form of a credit line that increases every year by the amount of interest due on the loan. This credit line is a hedge against inflation and gives you the option so if the stock market goes down, instead of selling stocks, you could borrow from your credit line instead.

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