Meet Jason and Denise

Jason and Denise, both 65, had envisioned a retirement filled with travel and entertainment, ticking off items from their bucket list one by one. However, due to unforeseen circumstances, they find themselves facing retirement a bit earlier than planned. While they believe they’ve prepared adequately, there’s a lingering uncertainty about whether their savings will truly sustain the lifestyle they desire.

They have combined retirement savings of $500,000 and a home valued at $600,000. Their goal is to draw approximately $40,000 annually from their nest egg to support their desired lifestyle—a figure their advisor knows may prove to be a stretch, perhaps even unrealistic, given their circumstances.

The Advisors Challenge

As financial advisors, we’re tasked with helping clients like Jason and Denise navigate these pivotal moments in life. But what do you say when their retirement dreams collide with the sobering reality of financial limitations?

What advice or options do you offer when the numbers just don’t seem to add up?

Today, we’ll delve deeper into Jason and Denise’s situation, exploring potential solutions and the one option they didn’t know they had—a solution that could transform their retirement outlook. Join me as we uncover valuable insights and strategies to help clients like Jason and Denise achieve their retirement goals.

Exploring Options for Jason and Denise:

Now, let’s return to Jason and Denise’s narrative to discover how incorporating the Modern Reverse Mortgage could potentially reshape their retirement strategy.

Upon hearing their advisor’s suggestion that a $20,000 per year withdrawal would be safer than $40,000, Jason and Denise felt a wave of disappointment. After years of hard work, they hadn’t anticipated having to tighten their belts and sacrifice the enjoyment they had looked forward to in retirement.

Facing this reality, they considered their options:

• Bite the bullet: They could accept a lower standard of living than what they wanted and adapt to a more frugal lifestyle.
• Roll the dice: Alternatively, they could choose to indulge in their retirement dreams early on, taking a chance that things would somehow work out. As the captain of the Titanic famously said, “What’s the worst that could happen?”

However, there is a third option:

• Use Their Housing Wealth: Is there a way to have the best of both worlds? Could a reverse mortgage provide a solution that allows them to maintain their desired lifestyle without depleting their savings?

Broaching the Reverse Mortgage Conversation

Their advisor, recognizing that Jason and Denise had a $200,000 mortgage that would consume $1,800 a month in after-tax dollars post-retirement, posed a crucial question: “If you had a choice, would you prefer that payment to be mandatory or voluntary?”

Jason and Denise exchanged surprised glances before responding in unison, “Voluntary, of course!”

The advisor nodded knowingly. “And what would that mean for you?”

The answer became evident: It would liberate $1,800 per month in after-tax dollars, or approximately $2,250 in pre-tax dollars each month! Multiplying $2,250 by 12 months revealed that they could retain $27,000 in their retirement savings.

With this realization, they no longer needed to withdraw the full $40,000 annually. By reducing their withdrawals by $27,000, they could limit their initial withdrawals to just $13,000 a year—below even their advisor’s suggestion!

Now, to some advisors, engaging in dialogues like the one presented may come naturally, but for many, it falls outside their comfort zone.

The Power of Partnership

This is where having a partner can make all the difference. Our Live Consumer Masterclass and On-Demand resources become immensely valuable in bridging that gap.

Imagine being able to offer your clients the opportunity to educate themselves further on these concepts without feeling the pressure to recommend specific solutions. That’s the beauty of our educational resources.

While you may not be comfortable or permitted to make direct recommendations, you can certainly suggest that there is an educational resource available, crafted by an adjunct instructor at the American College of Financial Services, that delves deeper into these topics.

Encourage your clients to explore the insights and strategies offered in our masterclass at:  www.housingwealthseminar.com

It’s a valuable opportunity for them to gain a better understanding of how they can leverage housing wealth in their retirement planning journey.

Remember, by empowering your clients with knowledge, you’re not only enhancing their financial literacy but also strengthening your advisor-client relationship.

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Education Via the Live Consumer Master Class

Again, this Case Study is precisely why we’ve organized the Live Consumer Masterclass every Wednesday in March. Advisors frequently encounter such scenarios, and as you’ll see, integrating the Modern Reverse Mortgage into this case opens up conversational avenues and solutions that many advisors may be unaware of or hesitant to introduce.

Here’s a thought to share with your clients: If we could leverage your housing wealth to enhance your desired retirement lifestyle without risking your future nest egg, would you be interested in exploring this possibility?