Should workers use reverse mortgages in retirement?

Should clients use reverse mortgages in retirement?
Clients should include home equity when planning for retirement and may want to consider a reverse mortgage as a source of income, according to this article on MarketWatch. “Far too many financial advisors overlook home equity as part of a retirement income plan. ..." says an expert. "Remember, there’s no magic home equity strategy that always works best. As an advisor, you need to incorporate home equity solutions into the client’s unique situation.”

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A home listed for sale at $7,498,000 on stands on Seale Ave. in Palo Alto, CA, U.S., on Wednesday, May 11, 2016. A custom-built home in the heart of California's Silicon Valley had its price cut by $500,000 last week after sitting on the market since the end of March -- a move that would've been almost unfathomable a year ago and a signal that frenzied demand has peaked. Photographer: Michael Short/Bloomberg

Despite common perception, annuities aren't all bad
More financial advisors are not recommending annuities to their clients because of the many disadvantages, including the unfavorable tax treatment of the distributions, according to this article on CNBC. "Variable annuities are a perfect machine for converting capital gains to ordinary income," says an expert. However, the financial products aren't totally useless, as they provide guaranteed income and allow annuity holders to take advantage of market rally with protection from volatility.

No 401(k)? No problem. Here's how to make the most of your savings
Clients who have no access to a 401(k) plan can still start building their nest egg by contributing to a traditional IRA, according to this article on personal finance website Motley Fool. They also have the option of making after-tax contributions to a Roth IRA. Those who want to save more than the contribution limits for a traditional or Roth IRA may opt to sock away the money to a SEP IRA or a solo 401(k) plan.

Consider $2M: The cost of long-term care for one aging parent
Clients are very likely to need long-term care in retirement because of increased life span, writes an expert on Forbes. Clients have to get professional help before buying long-term care insurance, as the decision involves several factors, writes the expert. "But we need to set assets aside and ensure that they are accessible when needed to pay for the high cost of long term care whether we self insure or buy a product."

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