Bridgeriver LLC July 2019



The Truth About Reverse Mortgages

Diving Deep and Finding the Best Option for Your Portfolio

In my experience, the stigma around reverse mortgages is unwarranted. While it can be somewhat ill-advised to play fast and loose with your finances, you’ll find that a reverse mortgage can help turn your financial tides in the right direction. The truth about reverse mortgages is much more comforting than you may imagine, especially if you’re getting toward the age of retirement. The fact of the matter is these helpful financial tools have been around since their

Here’s another important tidbit: If you can do a reverse mortgage and live off that money tax-free — which could end up being several hundred thousand dollars — your Social Security benefits may increase. Many people don’t realize that if you don’t take your

“Simply put, your best years are still ahead of you.”

Social Security benefits past the age of 66 (for those born between 1946 and 1954), the government will raise them by 8% every year, stopping at age 70! So, live off that mortgage and let your Social Security benefits keep stacking up. It’s an income bridge of sorts while you let these benefits grow. Not to be forgotten, let’s say that the market crashes, which tends to happen more than we’d like. Then you may want to take out a reverse mortgage to invest in the market for when it finally turns around. We have been shown time and time again that the market always comes back strong after a big fall. This provides the possibility of greater returns for your retirement portfolio. Like anything in retirement, there are a lot of moving parts. You should always meet with a trusted financial advisor and look at all the options and potential impacts they’ll have on your retirement income and taxation. There are over 55,000 reverse mortgages in the United States, with an average of $191,793 in principal limits and an average 4.6% interest rate.

inception in the early 1960s and have been backed by the U.S. government since the late 1980s. They are meant to help our nation’s aging population have a better, safer source of income once they hit the age of 62. Simply put, your best years are still ahead of you. Basically, a reverse mortgage lets you take equity out of your home. There are no payments, and you don’t have to pay it back until the last spouse leaves the home. As if that wasn’t enough, it’s all tax free by the IRS because it’s considered a loan. If you strictly get your news from the perilous edges of the internet, you’ll find out that a lot of articles only focus on the expense of a reverse mortgage, but nothing is that black and white in the tax world. If you start looking at how these mortgages affect other things, then everything starts making more sense. For example, if you focus on just the tax bill of a Roth conversion, you might miss the big picture. Many clients come to me and explain why they think that a Roth conversion doesn’t make sense for them because they’re too old for it to have any real effect. This couldn’t be further from the truth. Roth IRAs provide tax-free income, and what other financial advisors don’t realize is that if you have too much taxable income, then you could pay taxes on up to 85% of your Social Security benefit. There are a number of factors that need to be factored in to decide if you should convert or not.

That comes out to be $10.6 billion in financing every year. To find out if this is the right option for you, contact your friends at Bridgeriver Advisors. Give us a call at 248.785.3734 or visit our website anytime at

-Dan Casey



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