Financial planner: Reverse mortgages can help retirees with high property taxes
n a blog post published by MarketWatch, a reader explains how he is feeling financial pressure from property taxes and a financial planner explains how a reverse mortgage might help.
A retired public school teacher living in the Pacific Northwest told MarketWatch that he is feeling stressed by high property taxes on a fixed income and asks if he would be a good candidate for a financial adviser. One planner solicited for input thinks that a reverse mortgage could be a worthy consideration, among other options, according to a new blog.
“I am a 76-year-old widower who is [a] retired school teacher. My Social Security and retirement income is fixed at about $5,600 per month,” he said. “I have lived in Edmonds, Wash. for 49 years, and my property taxes rise quickly. My property taxes are about $16,000 for 2023-24, and likely will be $20,000 or more for 2025; home sales drive up my property taxes, not improvements. I do not have the money to keep up with these taxes with a $10,000 IRS limit on deductions.”
Kenneth Robinson, a certified financial planner at Practical Financial Planning in Cleveland, said that the retiree could consider a reverse mortgage as a option, noting he has come around on their benefits.
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“Once federal regulations were adopted some years ago, the Home Equity Conversion Mortgage (HECM) eliminated many of the problems we came to associate with the term reverse mortgage,” Robinson told the MarketWatch blog. “I used to dislike reverse mortgages. Now, for many homeowners, they can be the most efficient way to stay in their homes.”
Since the homeowner is a retiree on a fixed income and is well above the required minimum age to engage with the HECM program, the product could be an option if he meets other necessary qualifications, Robinson said.
Many originators in high-priced housing markets cite financial advisers as pivotal partners, and certain financial planners have started to more openly embrace reverse mortgages as a tool to help protect their clients against market forces and other potential losses.