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The Golden Nugget Advisors Are Overlooking

What If...

You could turn $100,000 spendable cash into $659,000 in 10 years?

Step 1: Convert Home Equity Into Tax-Free Cash

  • Your client is 67 years old

  • $100,000 investable assets

  • They own their $500,000 home free and clear

  • They qualify for a reverse mortgage with $156,000 cash out and a leftover $111,000 Line of Credit

Step 2: Add Cash to AUM

  • Your client now has $256,000 AUM growing during retirement

  • The reverse mortgage available Line of Credit continues to grow (1), increasing your clients safety net

Step 3: Portfolio Growth Over 10 Years

  • AUM valued at $457,000 (2)

  • Available Line of Credit on the reverse mortgage is now $201,580

  • Total spendable cash: $457,000 + 201,580 = $659,485

  1. A feature of the reverse mortgage line of credit that often surprises is that the unused line of credit grows annually.  Interest is not charged on the unused funds.  The line of credit grows at the expected rate.

  2. Assumes 6% growth

A New Solution...

To The Problem "I want to delay Social Security but I don't have enough cash flow"

The Challenge: 

  • Many clients are unable to delay SSI due to lack of cash flow

  • Clients who fund the gap using portfolio withdrawals face sequence of returns risk

  • Conversations during which you ask clients to cut back on $2 lattes

Conventional Options Include​​:

  • Credit cards

  • HELOC: Clients 62 or older often have difficulty qualifying for a HELOC due to lack of income.  Compared to a reverse mortgage, the HELOC requires monthly payments

  • Collect SSI earlier: Clients who collect benefits early make a substantial sacrifice

The New Solution: 

  • Reverse mortgage proceeds are used to fund the gap with tax-free money 

  • Preserving the portfolio mitigates sequence of returns risk during the important earlier years of retirement

  • Portfolio longevity and success rate increase to provide hihger income in later years when medical expenses are highest

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