I keep reading articles geared toward retirees waiting to take Social Security, taking on reverse mortgages, and otherwise mortgaging the future inheritances of their children or family members.
Personally, I like the idea of being able to leave something to our children upon our passing. Do I hope that our children are financially successful without an inheritance? Sure. But that doesn’t mean I don’t want to leave them with nothing should they not be millionaires when I die. In an effort to incorporate the financial futures of our children here is what I’m doing…or not doing.
Avoiding a reverse mortgage if at all possible
I like to use our home – which is paid off – as a portion of our asset allocation basket. And while it’s an asset that we could rely upon for income in retirement if necessary through a reverse mortgage, I’d prefer not to. I don’t want to give up the money we’ve put into our home, preferring to leave it to the children as a portion of their inheritance. Reverse mortgages can dissolve the equity that has been built in a home and leave heirs without what might be one of the greatest assets they could receive after our passing.
I enjoy working and being productive; therefore, the thought of working part-time in retirement doesn’t instill any great fear in me. In fact, I like the idea, since not only may it act as a financial failsafe should expenses be higher in retirement than we expect or there be an unexpected financial emergency, but they could allow us to preserve other assets, using this income ahead of drawing down retirement funds. This in turn could help us leave more to our heirs as their inheritance.
Holding dividend paying funds
Ever since I moved the balance of my IRA into a dividend paying income fund, I’ve been a fan of such investments. While it doesn’t pull down 40 or 50 percent annual increases when the stock market is hot, it also doesn’t rack up such losses when the stock market is in decline.
My fund still moves with the stock market as it ebbs and flows, but at a much less volatile rate. It also pays monthly dividends, which are now reinvested into the fund as additional shares, but that could be paid out regularly upon retirement. This would allow me to draw upon the fund, yet still maintain or even grow its principle until my passing.
Taking Social Security early
My desire to leave some sort of inheritance to my family has me looking to take Social Security earlier. Since Social Security benefits will disappear upon my death, any money that I leave on the table won’t be going to heirs. I would rather utilize this money first and foremost and for as long as possible in order to leave other assets such as retirement accounts, savings, or a home, potentially untouched or at least utilized in lesser amounts. In this way, these transferrable assets will be utilized to bolster Social Security payments, making up any gap between those benefits and expenses and hopefully allowing them to grow – or at least maintain – their value until my passing.
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Building a Revenue Producing Blog
I Won’t Be Waiting to Take Social Security
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The author is not a licensed financial, mortgage or estate planning professional. This article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader’s discretion.