How Can a Reverse Mortgage Impact my Social Security?
“I’ve heard a Reverse Mortgage can help me maximize my Social Security Benefits. How can one impact the other?
Let’s say your full retirement age is 66 and your monthly benefit starting at that age is $1,000.
If you start getting benefits at age 62, Social Security will reduce your monthly benefit 25 percent to $750 to account for the longer time you receive benefits. This decrease is usually permanent.
If you choose to delay getting benefits until age 70, you would increase your monthly benefit to $1,320. This increase is the result of delayed retirement credits you earn for your decision to postpone receiving benefits past your full retirement age.
The benefit at age 70 in this example is 76 percent more than the benefit you would receive each month if you start getting benefits at age 62 — a difference of $570 each month.
With a Reverse Mortgage at age 62, you can take the “tenure payment” option until you reach 70 and then take full advantage of the maximum social security payment.
Another option using the Reverse Mortgage would be to take the “line of credit” option and use the proceeds of your Reverse Mortgage when you need it to bridge the gap until you reach 70 and are able to receive the maximum social security payment.
* Make sure to always consult your Financial Planner and/or an Accountant prior to any major financial moves to make sure it is the correct move for you.