Reverse Mortgages can Delay Social Security

Reverse Mortgages can Delay Social Security and maximize payment

Reverse Mortgages can Delay Social Security and Maximize Payments

Reverse Mortgages can Delay Social Security and Maximize Payments

Retirees can delay claiming Social Security and receive larger payouts by tapping their home equity through a reverse mortgage and living off the proceeds, according to nationally syndicated retirement expert Mary Beth Franklin in a recent article for Investment News, titled How to Fund a Social Security Delay.

There are risks to waiting, because the longer you delay claiming benefits the longer it takes to make up the money you’ve not taken. An individual whose full retirement age benefit is $2,000 per month at age 66 would receive just $1,500 per month if he claimed at 62, versus $2,640 per month if he waited until age 70 to claim.

In addition to reverse mortgages, Franklin recommended living off retirement savings or purchasing an immediate annuity before claiming Social Security benefits. “The bonus of reverse mortgage payouts is they are tax-free,” wrote Franklin.

Wade D. Pfau, PhD, CFA, Professor of Retirement Income at The American College in Bryn Mawr, PA, added that reverse mortgages “may have the biggest impact for typical Americans approaching age 62 with few financial assets and most of their net worth tied up in their home. Home equity could provide a way to build that bridge to Social Security delay.”