Reverse Mortgage: The Smart Solution for One Retiree’s Income Gap

The situation: A 62-year-old homeowner was approaching retirement. Though he planned to stay in his current home for another 5–10 years before relocating south, his income was about to drop—from a $100,000 salary to $40,000 in retirement income. But his lifestyle required $80,000 annually. That left a $40,000 shortfall.

THE DILEMA: He had three options:

1. Withdraw from his IRA—but that would trigger steep taxes (about $10,000 for every $40K withdrawn) and cut short the long-term growth his advisor recommended.
2. Tap into Social Security early—but this meant permanently reduced benefits and still wouldn’t cover his needs.
3. Leverage his home equity—a promising option that wouldn’t disrupt his other financial plans.

THE STRATEGY: I conducted a full financial analysis, coordinated with his Financial Advisor and CPA, and modeled best- and worst-case scenarios. The smart move? A Reverse Mortgage that provided a tax-free monthly stipend to bridge his $40,000 annual income gap.

THE PAYOFF: His IRA continues to grow tax-deferred for another decade—avoiding an estimated $50,000 in income taxes.
Social Security benefits will be higher when he eventually claims.
If timed right, the interest on the Reverse Mortgage may offer a tax deduction at sale—potentially offsetting future IRA distributions.

THE BOTTOM LINE: A Reverse Mortgage isn’t for everyone—but when thoughtfully structured as part of a broader plan, it can be a game-changer.
Considering your own retirement income puzzle? Let’s talk about whether this powerful tool belongs in your strategy. Call me and let’s see if a Reverse Mortgage might be a good fit.

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Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.

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