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Old 09-29-2009, 12:21 PM
 
Location: Savannah GA/Lk Hopatcong NJ
13,106 posts, read 24,889,480 times
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Quote:
Originally Posted by TuborgP View Post
In a way you could say a reverse equity loan is. You are borrowing your kids future inheritance to fund your retirement in a way of sorts.
Kid's inheritance???? Is that some form of entitlement?? Did they kick in any $$$ to my retirement funds??
I don't expect any inheritance from my parents both just working class people and I hope mine aren't waiting for any from me...if there is some left they may have it but I'm certainly not going to be scrimping my pennies in retirement to leave an inheritance
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Old 09-29-2009, 12:33 PM
 
Location: Orlando
8,178 posts, read 16,549,120 times
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Quote:
Originally Posted by Laura707 View Post
Would you dig into your retirement money to loan it to one of your kids?

So, you work all your life to save and plan for your future when you retire. One day one of your kids show up with a sad story and in dire need for some money to get them along until things get better. This adult child has many, many years to recover from this predickment they are in at this time but you are retired, this is money you planned ahead for, made sacrifices and wiser choices to save and you have no way of replacing if they can not pay it back.

Would you let them have it knowing that is all you will have and no chance of replacing it if they don't pay it back?

I'm going to say...no. It sounds harsh but I've worked hard and done without to be able to save what's in my retirement account.
I'm not yet at retirement age but even at 47 I wouldn't be taking $$ out.

Would I help them out? Probably, but the retirement fund is off limits.
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Old 09-29-2009, 12:39 PM
 
Location: Sierra Vista, AZ
16,133 posts, read 20,824,289 times
Reputation: 8293
Perhaps I am fortunate, the one child who lives at home actually contributes greatly to our livelyhood. My other child needed a large dose of cash for a downpayment and a car both of which I was able to provide without having to worry about being paid back. I figure I would rather have there than here.
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Old 09-29-2009, 03:07 PM
 
Location: Sacramento
13,784 posts, read 23,809,056 times
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Quote:
Originally Posted by mathjak107 View Post
The typical high fees of tens of thousands of dollars and the cap on how much you can get usually have you running out of money and home equity early in the game.. not a good idea for most. (bet they forgot to mention that in the brochure)
I believe that the monthly income is guaranteed for as long as you remain in your home. The "tenure" HECM reverse mortgage, backed by HUD, provides a flat rate of monthly income as long as at least one of the homeowners (assuming joint ownership) continues to live in the home as a principal residence.

Two significant advantages here:

- The monthly income is completely tax free (both federal and state taxes)

- The owner no longer has monthly mortgage payments, only the property taxes, insurance and any applicable HOA fees.
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Old 09-29-2009, 03:50 PM
 
Location: In the real world!
2,178 posts, read 8,480,548 times
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This thread is not about reverse mortgages, it is about kids wanting to borrow your retirement funds.

Quote:
Tuborg wrote-In a way you could say a reverse equity loan is. You are borrowing your kids future inheritance to fund your retirement in a way of sorts.
Toborg was just using that as an example and how ( I am assuming) some of these children would look at it.

It is not a medical emergency, no major disaster.. They just need some cash to make their life easier during these hard times with the economy like it is these days.... Hay, and keep in mind that your retirement funds have already taken a big hit because of the economy.

Last edited by Laura707; 09-29-2009 at 03:59 PM..
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Old 09-29-2009, 04:04 PM
 
71,559 posts, read 71,730,589 times
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Quote:
Originally Posted by NewToCA View Post
I believe that the monthly income is guaranteed for as long as you remain in your home. The "tenure" HECM reverse mortgage, backed by HUD, provides a flat rate of monthly income as long as at least one of the homeowners (assuming joint ownership) continues to live in the home as a principal residence.

Two significant advantages here:

- The monthly income is completely tax free (both federal and state taxes)

- The owner no longer has monthly mortgage payments, only the property taxes, insurance and any applicable HOA fees.
theres a maximum amount they will give you, with some you are free to take it any way you want even 1 lump sum. it could be a relativly low number in proportion to whats needed for a lifetime of income depending on home value and age . usually if you take to much each year you can find yourself maxed out and no more equity or income coming in... expenses on it can hover around 30,000 bucks alone... there is sooooooooooooo much fine print that they are worse then variable annuties to figure out

http://money.cnn.com/2009/08/31/real...ion=2009090106

Last edited by mathjak107; 09-29-2009 at 04:19 PM..
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Old 09-29-2009, 06:15 PM
 
Location: SoCal desert
8,093 posts, read 13,232,688 times
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Quote:
Originally Posted by Laura707 View Post
They just need some cash to make their life easier during these hard times with the economy like it is these days....
My answer would be no.
My retirement savings will make my life easier.
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Old 09-29-2009, 06:30 PM
 
Location: Planet Eaarth
8,955 posts, read 17,703,531 times
Reputation: 7193
Quote:
Originally Posted by Laura707 View Post
Would you dig into your retirement money to loan it to one of your kids?

So, you work all your life to save and plan for your future when you retire. One day one of your kids show up with a sad story and in dire need for some money to get them along until things get better. This adult child has many, many years to recover from this predickment they are in at this time but you are retired, this is money you planned ahead for, made sacrifices and wiser choices to save and you have no way of replacing if they can not pay it back.

Would you let them have it knowing that is all you will have and no chance of replacing it if they don't pay it back?
Let's see here........YOU loan your retiement money to your kid(s) then you have no money to live on in retirement. Then your health fails So you can't work which leads to the $64,000 question.........CAN YOU COUNT ON YOUR KIDS TO TAKE CARE OF YOU THE REST OF YOUR LIFE!

If not then let junior fend for him/her self they will thank you when you get old and need care they will have to pay for.
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Old 09-29-2009, 06:36 PM
 
Location: Sacramento
13,784 posts, read 23,809,056 times
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Quote:
Originally Posted by mathjak107 View Post
theres a maximum amount they will give you, with some you are free to take it any way you want even 1 lump sum. it could be a relativly low number in proportion to whats needed for a lifetime of income depending on home value and age . usually if you take to much each year you can find yourself maxed out and no more equity or income coming in... expenses on it can hover around 30,000 bucks alone... there is sooooooooooooo much fine print that they are worse then variable annuties to figure out

Is a reverse mortgage right for you? - Sep. 1, 2009
No, you receive the income as long as you live.

You need to check out the HUD site for the information, but even your referenced site doesn't state that there is a ceiling on what you receive. The ceiling is the value they use to calculate your home value. If you way outlive the actuarial age, and stay in your home, you "win" more money each month.


Back to the original poster, you seemed to answer your own question. Of course you shouldn't support kids with your retirement funds.
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Old 09-29-2009, 06:38 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,569 posts, read 39,952,759 times
Reputation: 23704
answer NO in my situation, as I have seen many elderly parents 'abused' in this way. (over 10 couples I can think of at the moment)

I just spent the afternoon helping a 'soon-to be-retired' neighbor get his business assets ready to sell ONLY because he foolishly lent $$ to a son who was facing foreclosure. He had already 'helped' and had cash tied up in property, THEN son defaults, dad (and mom) decide to additionally cover the default to try to protect their initial investment. In hindsight, he says it would have been best to let the foreclosure happen. The resultant debt is 3x original investment, retirement savings is nil, Potential to recover is less than nil, health is deteriorating, had to 'evict' the son so they can try to sell. Additional loans needed to 'fix-up' the property creates a terrible obligation for potential retirees looking forward to low income. This is a classic case, as the property was very pristine view prop that the son expected to 'skin-the-fat-cat' on profit from subdividing. Now, he has fleeced his parents, and they are up to their eyeballs in debt, and no market for pristine view lots.

In my own case.... I was 'blessed' with getting elder care the day I turned 18. It came from an unforeseen medical disability, and complete with bankruptcy, 5 insolvent businesses, a disaster of a very nice commercial development, and subsequent eviction from beautiful country home we had all built from scratch. Also came with MANY bills from personal family friends that I made as whole as possible, while doing eldercare, working 3 jobs, and going to college. Not pretty, but that's life (35 yrs ago...) I survived.

I recommend (paying) sending the 'kids' to a GOOD credit counselor and give them some education that will keep them more frugal and responsible. DO NOT be an enabler, be compassionate and help with food and moral support. DO NOT lend money from retirement for something they got themselves into. Feed the kids and grandkids, show them that you love them, and assure they get counseling help they need, BUT let them fight the battle, and let THEM win. That will be the most valuable gift you can give them.

We learn from adversity, this is just part of their education. Don't 'short-circuit' their opportunity.

Quote:
Hay, and keep in mind that your retirement funds have already taken a big hit because of the economy.
Precisely why now IS NOT the time to 'spend' on kids. Growth opportunity follows decline, and we've had a big one!!! if you miss the recovery (not knowing WHEN that will come...) but, chances are you will see double digit yrs of growth, and you don't want your funds 'tied-up' at that time
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