A New Government Stimulus Package That Can Help You Live Off Your House

Learn How the New American Recovery & Reinvestment Act of 2009 Signed Into Law by the President on February 17, 2009 Can Help You Supplement Your Retirement Income

It’s not uncommon for a personal residence to be a family’s most valuable asset.The problem in leveraging this valuable asset is the home’s relative lack of liquidity, but now there is relief for “house poor” homeowners.

Congress has recently approved new guidelines enhancing the lending limits under the FHA program called the Home Equity Conversion Mortgage (HECM). These enhanced limits allow seniors to gain a greater income benefit than ever before.

To learn more about reverse mortgages and how they can free up home equity for income and other expenses, we interviewed Bruce Barnes, President of EquiPoint Financial Network, a San Diego reverse mortgage leader.

Kevin: Bruce, thanks for stopping by to talk to us about this important new legislation and how it’s really going to help folks more than ever before. How have these new guidelines changed the reverse mortgage program?

Barnes: Over the past few years, most senior homeowners have been introduced to this program but many are still uncertain about how they really work. The basics are still the same: you need to be 62 or older to qualify and there are no income, credit or health requirements. Additionally, no payments are required as long as the homeowners live in their residence.

Kevin: That’s great, Bruce, so how is this program different today?

Barnes: That’s a good question because there have been numerous changes that have enhanced the program since its inception. Most of all, lending limits have been raised so that seniors may access more of the equity in their home than before. At the same time, the government has created better regulations to protect seniors while focusing on creating a true retirement benefit. In fact, most seniors don’t know that they may use this program to simply refinance their current mortgage with a lower interest rate. And just like a normal loan, they may continue to pay their mortgage down and pay it off.

Kevin: So let me get this straight, a senior may use this program like any other type of loan?

Barnes: Absolutely. However, unlike a traditional loan where a payment is required, a reverse mortgage provides the flexibility to make no payment at all. Homeowners may also pull extra money from their home to pay off debts, increase their income, take a vacation and live better in retirement. Honestly, anyone with a current mortgage or investment portfolio that is down needs to consider this benefit more seriously. It may simply provide greater security and peace of mind.

Kevin: That’s good, but don’t seniors have to give up ownership of their home to the bank?

Barnes: No! This is one of the biggest misconceptions about the reverse mortgage and it is completely untrue. With a reverse mortgage, seniors never give up ownership of their home. If they decide to sell their home, the equity remaining after the loan’s payoff remains theirs or will go to their children or beneficiary if they have passed.

Kevin: It looks like the reverse mortgage really provides senior homeowners with a lot of choices and that’s always good. One more thing before you go. We all like David Letterman’s Top 10 lists, so what are the “top” reasons why folks are getting reverse mortgages today?

Barnes: That’s an easy one, but I’ll keep it simple and provide just the Top 4.

Most people get a reverse mortgage to:

1) eliminate an existing mortgage payment.

2) increase monthly income because investments are down.

3) fund medical and long-term care solutions.

4) create a better lifestyle.

Kevin: Excellent. Who knew your home could do so much for you while it’s just sitting there? Thanks for your time, Bruce. We hope you’ll join us again soon.

Barnes: You’re welcome. I enjoyed answering your questions.

How To Safely Weather Today's Unprecedented Market Volatility Without Losing Your Shirt To A Bear

“For Stocks, Worst Single Day Drop in Two Decades”

This headline from the New York Times on September 29, 2008 well illustrates the parade of bad reports that have dominated the news over the past year.

Stocks. Bonds. Mutual funds. Even real estate. All of these investments have suffered from the negative effects of the current economic debacle. Unlike any recession before, there has been no true safe shelter. As a result, there is now a “flight to safety” as investors and retirees return to a more balanced and conservative investment approach.

Imagine that! Investing for the long-term while protecting your hard-earned money and retirement savings. Sounds like a good idea, but where do you actually go to put your “safe money”?

Unfortunately, with the current low interest environment, CDs, money market funds, bonds and other fixed investments hardly pay enough to keep up with inflation. And the diminutive net earnings they do make will probably be consumed by income taxes. Consequently for many today, a safe return often means no return at all!

On the other hand, many others with more appetite for risk and looking for growth have their monies sitting on the sidelines just waiting for a market rebound.

The bottom line is that we all want to have our cake and eat it too, right? We want both SAFETY and GROWTH, but can we really have it all? The surprising answer is YES, WE CAN HAVE IT ALL.

Upside Market Potential & Principal Protection with an Equity Indexed Annuity

Today’s new breed of annuities have risen to the challenge and provide a long needed solution for savvy but cautious investors. Although indexed annuities are not market investments, their returns are tied to market indexes. If the market performs well, your annuity performs well. And if the market tanks (again), your principal is 100% protected from losing even one penny of your hard-earned retirement savings. That’s a WIN-WIN for you, the investor!

So don’t time the market and risk your valuable retirement nest-egg. Instead, take advantage of the market with a principal protected indexed annuity.

PUBLISHED IN THE APRIL 2009 FIDELITYASSURANCE NEWSLETTER

Keep Your Hands Out of the Retirement Plan Cookie Jar

The need for self-control and the propensity to give in are something we all must grapple with on a daily basis. But the now well known adage to "Just Say No" applies to much more than just resisting the urge to smoke, drink too much, or indulge in other unhealthy lifestyles. For many, this includes the urge to dip into their retirement savings when things get tight.

According to a recent report in the Wall Street Journal, more Americans are now dipping into their retirement funds than ever before. And recent economic conditions make it easy to justify doing so. Part of the problem is that liquidating or borrowing even a few thousand dollars in one's 401(k) doesn't seem too harmful, particularly when families are scrambling to pay bills in the face of unemployment or unexpected medical bills. But it is harmful and even reducing one's retirement account by "just" a few thousdan dollars can have a huge impact on one's future retirement income.

Can a few thousand dollars really make that big of a difference? The answer is Yes. And the answer is even more Yes when considering that future resources for retirement income are drying up.

With pensions going the way of the dodo bird, most Americans will have to rely on their personal and retirement savings more than ever. This on top of the fact that studies show 4 out of 5 Americans aren't saving enough for retirement to begin with. Then add in rising medical care, increased longevity and the "i" word (inflation), and you're talking about adding real insult to your retirement injury!

The good news is that you can Just Say No to borrowing or spending down your retirement savings. It might require a little fiscal dieting, but the long-term prognosis for your future will be much healthier.