Retirees vs Work

If retirees need money and can't fathom the thought of working at a real job, there are a few cash-generating options.

One might be to sell the house and take their $250,000 for one and $500,00 for a couple, tax exemption. This would assist a senior couple in moving into a smaller residence or less expensive living situation.

Another might be to consider a Reverse Mortgage. If a senior has paid off most of their mortgage and is at least 62 they can qualify for a reverse mortgage that will pay them. This type of mortgage allows a senior to convert the equity in their home into a stream of monthly income. They can opt for a large lump sum if necessary or small monthly payments. Many seniors have medical bills or large credit card debt that would benefit from the one lump sum option.

Another Reverse Mortgage program will wire money into the seniors' account when they ask for it. This program acts as a security blanket and can be utilized for car repairs, vacations, or medical bills.

The amount the senior gets depends on their age, their home's value and the interest rates at the time the loan is generated. The lower the interest rate, the higher the loan amount.

Because interest rates have been low and home values have been rising, reverse mortgages have been growing in popularity. They're not for everyone, though. If a senior is planning to move in a couple of years, the up-front costs wouldn't make a reverse mortgage worthwhile. Even if they are planning to spend the rest of their lives in their home, they shouldn't jump into a reverse mortgage without first considering all of their options.