Planning for retirement is more complex than ever. A longer life expectancy brings both opportunities and challenges. Instead of stopping work entirely, consider a Phased Retirement process—working less while still maintaining some income and purpose. Here’s why this approach makes sense and how it can address critical issues like the Time Horizon Problem:
- Longevity Risk is Real
- Americans are living longer, and that’s great! But it also means you may need your savings to last 20-30 years—or more.
- Without a clear financial plan, you risk outliving your assets.
- The Time Horizon Problem
- Retiring early without enough savings can shorten your ability to fund the later years of life.
- Financing longevity requires thinking beyond just the first phase of retirement. A phased approach can stretch resources further while maintaining flexibility.
- The Role of a Reverse Mortgage
- A Reverse Mortgage or Reverse Mortgage Line of Credit (LOC) can provide tax-free funds to help offset rising living costs.
- With a growing LOC, you create a safety net that increases over time, regardless of market conditions.
- Funds from a Reverse Mortgage LOC can supplement your income, helping you delay drawing down other retirement assets prematurely.
- Phased Retirement + Reverse Mortgage = Financial Stability
- Working part-time and leveraging a Reverse Mortgage LOC allows for a more balanced and sustainable approach to retirement.
- You maintain financial independence while addressing future healthcare, housing, and lifestyle expenses.
Having a plan that incorporates these tools is critical to navigating the phases of retirement and mitigating longevity risk. Don’t leave your future to chance—be proactive and informed.
For more information about Reverse Mortgages or Phased Retirement planning, contact Michael Pankow at 916.296.7765, NMLS #220611.
