Press Releases
For Immediate Release
Contact: Larry DeFeo, CMC, CSA
President
Ladd Mortgage, LLC
Phone: (800) 343-4448
E-Mail: ldefeo@laddmortgage.com
Thursday July 10, 2008
Retirees Find Alternative to Going Back to Work
After leaving the rat race to enjoy retirement, many retirees find that their financial demands are greater than expected. Going back to work may seem like the only solution, however, an increasing number of retirees are opting to take out a reverse mortgage.
"I was considering returning to the workforce, but after years of a high pressure job in a large company, that was the last thing I wanted to do," Charlotte Narkawicz of Bloomfield, Connecticut said.
"Before I made the decision to proceed with a reverse mortgage, I shopped and contemplated whether it was the right thing for me. I was going through a very tense time in my life and my home was in need of repairs and a new roof. With help from Larry DeFeo of Ladd Mortgage I was able to make the decision to proceed. The reverse mortgage has allowed me to complete my home repairs, improve my landscaping and give my home curb appeal, which has increased my property's value. I am so pleased and feel secure with my reverse mortgage. Instead of going back to work, I sit on my front porch and watch everyone scurry to and fro. My life is excellent now!" said Narkawicz.
According to a report by the Employee Benefit Research Institute, 37 percent of retirees report having to go back to work after retirement. This is up from 27 percent in 2006. Finances were identified as one of the primary reasons.
When you factor in retirees unable to go back to work due to a health-related problem or caring for a spouse, the percentage is much higher.
For some retirees, going back to work is more a matter of wanting to stay active and productive. For others, it is a financial necessity. In either case, there are financial consequences to consider:
- It can decrease the benefit amount from Social Security for those who have begun receiving Social Security and have not yet reached the "full retirement age" (65 to 67, depending on when you were born).
- There is no change in the benefit amount from Social Security for those who have reached "full retirement age."
Other important considerations include a possible increase in your tax obligation and work-related expenses. Social Security benefits received at any age become partially taxable once your income exceeds a certain level (the specific amount is adjusted annually). Also, you have the expense of commuting to and from work. With the rising cost in gas prices, this may make going back to work cost-prohibitive.
An alternative for many retirees faced with having to go back to work is to take out a reverse mortgage, which enables homeowners 62 and older to convert the equity in their home into a lump-sum payment, monthly income, a line of credit, or a combination. No repayment is required for as long as you occupy your home as your primary residence.
"Funds from the reverse mortgage do not affect Social Security or Medicare benefits," Larry DeFeo, CMC, CSA, President at Ladd Mortgage, LLC said. "Our senior customers have been able to continue to enjoy their retirement with the peace of mind of knowing they will not outlive their retirement income." (Ladd Mortgage, LLC provides you with a free reverse mortgage informational package and confidential estimate by calling them toll-free at 800-343-4448 or by visiting www.laddmortgage.com.)
The money from the reverse mortgage is tax-free because it is not considered income.
As a retirement tool, the reverse mortgage is growing in popularity. The Department of Housing and Urban Development (HUD) reports that 9,112 reverse mortgages were endorsed in May 2008. This brings the year-to-date total to 73,875, a 3.3 percent increase over 2007.
For retirees who are not able, or do not enjoy the prospect of having to go back to work, the reverse mortgage may just be the answer.