Category Archives: SafeMoney

Learning how a HECM can help is a highly personal and confidential event

Those who consider a HECM (reverse mortgage) in order to retrench their finances or as we say, “build a retirement highrise and take the elevator to the top” in retirement don’t need to be treated like an email as part of an advertising event. This is a highly personal exchange and we bring integrity to the discussion becauses we know you care about that from lots of years of experience working with this retirement theme. You’ll like working with us at The Federal Savings Bank. We have a very positive view of the HECM and believe you have full rights to decide for yourself professionally whether or not you take control in order to use your own home equity with this solution. We answer all questions professionally.

Yes, we use emails and webpages like this one when we can because they provide quick and reliable support to deliver important information to and from those we serve as clients.

We also use postcards and personal letters and visit clients personally when we can, by phone or with inhome visits. We consider our role professionally based on integrity. We love to help.

There is no substitute for quality people-to-people communication. We earn your trust right from the get go. Call us anytime to start the discussion.

I hope you’ll trust us by asking questions and expecting straight answers as you sort out the unprofessional explanations many give and get for what used to be called the reverse mortgage. Yes, we call it the HECM (Home Equity Conversion Mortgage) because that is so much more an accurate description — the reality of using home equity to shore up retirement finances — the reality of home equity ownership.

You should be aware that not all those who give information about what they refer to as the “reverse mortgage” are aligned with the truth as we know it and will sometimes shade real issues to support their own sales efforts with competing products.

Thanks for expecting integrity here at Gofinancial.net. As 12 year HECM VETERANS, WE BELIEVE IN THE Home Equity Conversion “Mortgage” as it opens the door to use of your home equity in retirement. WE BELIEVE IN YOUR RIGHT TO USE IT WITH INTEGRITY. Review the many HECM articles here taken from a cross section of professionals and get more information to plug into this unique service on your behalf.

As part of government regulation, you will experience HECM COUNSELING to help sort out the facts if there are unanswered questions. Furthermore, prospective borrowers are not bound by any agreement until 3 days after a HECM CLOSE in case you forgot to ask an important question about HECM.

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Talking to a new HECM (PLUS) audience

WITH THE IMPLEMENTATION OF FINANCIAL ASSESSment
and draw limitations, the most likely borrowers
against their home equity have changed. If the old industry
mantra was simply eliminate your forward mortgage
payments, the new mantra is a more complex look at
fi nancial planning. How do you best utilize a HECM in
conjunction with other savings tools? And what can you
use it for?

These statements open a whole bunch of new dialogue with those thinking about a HECM now. It is no longer billed as the loan of last resort, though it may well be the last loan you’ll need in retirement.

HECM spectrum

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It will answer a lot of your questions upfront.

Banker Bio Flyer_warren strycker

 

What if social security disappeared tomorrow?

What if American citizens’ pessimistic concerns about Social Security and its viability for the future turned out to be accurate?

What if tomorrow Congress got together and came to a fateful compromise? Rather than trying to increase taxes or allow private investment accounts with the currently collected FICA taxes, they dissolved the program.

It is a drastic scenario but one believed possible by a high percentage of future recipients, and a majority of millennials. As recently as last year, 81 percent of this demographic stated they were concerned Social Security would not be there in the future, according to a study by Transamerica’s Center for Retirement Studies.

Perhaps ironically that same study concluded that generation was taking steps to save far more proactively than prior generations. They are going to need to, for sure.

Retirement planning – with no assumed income from any source or accumulated savings – is tough for the average household, even those closer to retirement. Consider a household without work, rental income or pensions but $250,000 saved. The family would have just $10,000 a year of income assuming the 4 percent rule for how much they would withdraw in the first year of retirement.

And considering the average household doesn’t have near that figure saved, there would be millions of families with no real hope of stepping away from work.

On the other hand, under this hypothetical scenario practically every worker in America would see a substantial increase in cash flow overnight. If there is no future benefit to receive, there would be no FICA tax to pay on either the employee or employer side. This represents 6.2 percent of income up to $117,000 or a maximum of $7,254 per year, per person and also up to that amount of savings for the employer.

Not everyone earns $117,000, but what would people do with an instant several hundred dollars a month after tax? Some would spend it, leaving them nothing for their old age. But others would pay down debt and save the rest to recreate the safety net Social Security provides.

And what would employers do? Would they forward on that money to employees or keep it as profit causing the stock market to explode, or reinvest it for growth, possibly creating more jobs?

No one knows what the future holds, or what possible adjustments to the system future leaders will make. A more gradual shift to a later retirement date seems likely, just as was done in 1983. When that amendment was passed, it didn’t affect a single person’s benefit for 17 years, and increased the retirement age over a 22- year period.

Simply repeating this step would lead to Social Security’s viability for decades to come.

Keep in mind people’s natural inclination to “not believe it until I see it” as well. In a survey done in 1979, only 32 percent of workers believed Social Security would be able to fund its future benefits, according to the Social Security Bulletin.

That’s 36 years ago and counting. Those same survey takers are, thankfully, today’s recipients.

Brian Kuhn is a certified financial planner at PSG Clarity, a division of Planning Solutions Group, who lives in Odenton with his wife and two daughters. You can reach him at 301-543-6035 or www.psgclarity.com. He offers securities through Triad Advisors, Member FINRA/SIPC. Advisory Services offered through Planning Solutions Group, LLC. Planning Solutions Group, LLC is not affiliated with Triad Advisors. PSG Clarity is a division of Planning Solutions Group, LLC.