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Klein News

Lauren Klein discusses reverse mortgages in Financial Advisor magazine

The following excerpt was published in the article Reverse Mortgages Seen By Advisors As Option of Last Resort by George Yacik on the website www.fa-mag.com on December 11, 2018.

Reverse mortgages, which allow homeowners to take out a loan against their home equity without having to make monthly mortgage payments, also have some tax advantages, advisors said. “If the bulk of the individual’s retirement savings is held in an IRA, withdrawing assets before age 70½ will result in a sizeable tax burden,” noted Lauren Klein, owner of Klein Financial Advisors in Newport Beach, Calif. “A reverse mortgage is a highly tax-efficient way to supplement retirement income and manage cash flow. Because the money is a line of credit based on the value of the home, there are no taxes to pay. It can also provide the funds needed to delay Social Security until age 70. Plus, with an available line of credit, clients are less likely to be forced to sell stocks from their portfolio for additional cash during a down market.”


“While it is good to have a reverse mortgage as an option on the table, it is usually only a good idea after all other options have been exhausted,” said Michael Minter, managing partner at Mintco Financial, which has offices in Buffalo, N.Y., and Tampa, Fla. “In my view, a reverse mortgage falls into the last resort bin of ideas. None of my clients have them.”

Nevertheless, Klein said clients should always keep that door open. “While a reverse mortgage isn’t right for everyone, when used correctly and strategically, it may be just the solution to manage cash flow and protect a client’s portfolio in retirement,” she said. But, she added, “the best time to get a reverse mortgage is before it’s needed. A reverse mortgage should never be used as a last resort when all other assets have been depleted. Having this flexible resource available if and when it’s needed can help turn a client’s home equity into a powerful and strategic financial planning tool for decades to come.”

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All written content on this site is for information purposes only. Opinions expressed herein are solely those of Lauren S. Klein, President, Klein Financial Advisors, Inc. Material presented is believed to be from reliable sources and we make no representations as to its accuracy or completeness. Read More >