Reverse Insider | April 2022

Reverse Insider | April 2022

Y E A R 2 | V O L 4 | A P R I L 2 0 2 2 REVERSE Insider R E V E R S E M O R T G A G E F U N D I N G N E W S L E T T E R

SPRING INTO ACTION April is National Financial Literacy Month and National Volunteer Month

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Spr ing i s the season of f resh star ts . And s ince Apr i l i s both Nat ional Volunteer Month and Nat ional F inanc ial L i teracy Month, why not sei ze the oppor tuni ty to make a di f ference in the l i ves of others , as wel l as your own? SPRING INTO ACTION: MAKE AN IMPACT IN APRIL

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National Volunteer Month encourages active volunteerism and celebrates those who generously lend their time. From stocking the shelves at the local thrift shop to walking shelter dogs or serving food at a local shelter, there are numerous ways to make an impact in your community. And during your retirement years especially, volunteering can benefit your own well-being by giving you a fresh sense of purpose and accomplishment. Speaking of work, whether you’re newly retired or approaching the retirement, National Financial Literacy Month is the perfect time to prepare your finances for the future. While most Americans believe they’re financially savvy, few actually are. According to a study by the American College of Financial Services, 80% of older workers are financially illiterate. No matter your age, a solid financial plan will help you pay down debt and build a savings to carry you through retirement.

This month, plant the seeds for a brighter future. There is no better time to reinvent yourself, ignite new passions and take steps toward improving your financial wellness for the best years ahead.

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CELEBRATING OUR PLANET: EARTH DAY IS APRIL 22

Fr iday , Apr i l 22 i s Ear th Day . Mi l l ions of people across the U.S. and Canada celebrate thi s annual event to play an act i ve role in bui lding a c leaner , more sustainable planet .

Plant a t ree, f lowers or your own vegetable garden Take a wal k to apprec iate nature Vi s i t ’ s a farmer ’ s market or take a tour of a farm to learn more about where your food comes f rom Thi s year ’ s theme — “ Invest in Our Planet ” — cal l s on you to f ight c l imate change, suppor t eco- consc ious products and encourage everyone to do thei r par t . There are so many ways to mark the day , even f rom your backyard:

Plan or par t i c ipate in a communi ty c lean-up event Hang a bi rd feeder and watch who comes for a v i s i t

No mat ter how big or smal l your act ions , commemorat ing Ear th Day i s an impor tant step toward a heal thier planet for al l .

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FOR NATIONAL VOLUNTEER MONTH, RMF IS PROUD TO HELP COMBAT SENIOR HUNGER IN AMERICA

You may be surpr i sed to learn that the nat ion ’ s 65+ populat ion jumped by over a thi rd dur ing the past decade? As thi s age group cont inues to grow, communi t ies are cer tain to see an increased number of older Amer i cans deal ing wi th the chal lenges l i ke i solat ion, home safety and hunger . Pr ior to the COVID-19 pandemi c , near l y 10 mi l l ion U.S. seniors st ruggled wi th hunger . Today , mi l l ions more are exper ienc ing food insecur i ty and vulnerabi l i ty , and they ’ re in need of urgent suppor t . That ’ s why Reverse Mor tgage Funding (RMF) par tners wi th Meal s on Wheel s Amer i ca in i ts mi ss ion to address the unmet needs of our most vulnerable populat ion. A powerful partnership Meal s on Wheel s helps older Amer i cans l i ve nour i shed and independent l i ves at home — where they want to be — by prov iding serv i ces to ensure that no one i s lef t hungry or i solated. They work to empower local communi t ies to improve the heal th and qual i ty of l i fe for al l seniors served. Because for st ruggl ing seniors , a dai l y hot meal and f r iendl y v i s i t can change a l i fe.

RMF ’ s object i ve has always been to help older Amer i cans l i ve a comfor table, safe and f inanc ial l y secure ret i rement in the comfor t of thei r home. Work ing alongs ide an organi zat ion l i ke Meal s on Wheel s Amer i ca i s a natural f i t and an impor tant investment . As a donor to the Meal s on Wheel s Momentum Ci rc le s ince i ts incept ion, RMF aids in the research, programming and v i tal resources necessary to suppor t Meal s on Wheel s Amer i ca for older Amer i cans . Says Col leen Clark , Di rector of Nat ional Par tnerships for the Meal s on Wheel s Assoc iat ion of Amer i ca, “ In 2021, Meal s on Wheel s Amer i ca began the Momentum Ci rc le to keep the momentum going af ter the pandemi c . We st i l l needed companies and donors to step up and suppor t . RMF was one of the f i rst donors to come on and be a par t of i t . We recogni ze that there are incredible synergies between our brands , and we ’ re exc i ted about our par tnership. ” At RMF , our local loan spec ial i sts are act i ve communi ty leaders who st r i ve to maintain long- term relat ionships in helping older homeowners ret i re more f reel y wi th a reverse mor tgage.

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We are proud to suppor t Mea l s on Whee l s ’ commi tment to the loca l communi t i es served . Pl ease v i s i t the fol lowing s i tes to he lp join our mi ss ion: # ‡

Suppor t thi s remarkabl e organi zat ion: mea l sonwhee l samer i ca . org S i gn up to volunteer wi th Mea l s on Whee l s in your communi ty : www. amer i ca l etsdolunch . org Learn more about senior hunger in your state and nat ionwide : ht tps : / /www.mea l sonwhee l samer i ca . org/ l earn-more/ facts - resources Donate to Mea l s on Whee l s Amer i ca : www.mea l sonwhee l samer i ca . org/donate

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LEVERAGING A REVERSE MORTGAGE AS A TAX-SAVVY RETIREMENT SAVINGS TOOL*

To ret i re comfor tabl y , more and more ret i rees are cons ider ing the benef i ts of a reverse mor tgage loan. Thi s f inanc ial tool was des igned exc lus i vel y for older homeowners to conver t a por t ion of your home equi ty into funds you can use at your di scret ion — f rom managing debt to cover ing medi cal expenses or supplement ing ret i rement income.

And they usual l y don' t af fect your Soc ial Secur i ty or Medi care benef i ts . These programs cons ider your age, rather than your income or assets in thei r cal culat ions . They may , however , impact needs -based benef i ts such as Supplemental Secur i ty Income or Medi caid, so i t ’ s impor tant to speak wi th a f inanc ial adv i sor regarding your unique s i tuat ion. Remaining in good standing is key As wi th any mor tgage, you must cont inue to meet your loan obl igat ions , such as keeping current wi th proper ty insurance and taxes . You ’ re al so respons ible for bas i c upkeep and home maintenance. I f you fai l to meet the terms , your loan may become due and payable. You may be forced to sel l the home in whi ch capi tal gains on the sale may have an indi rect impact on your taxes . The IRS does al low a spec ial exc lus ion to lower the capi tal gains tax — or the fee you owe on your prof i ts — as long as you own and have l i ved in the home as your pr imary res idence for two of the last f i ve years . I f thi s i s the case, you can exc lude up $250,000 i f you ’ re s ingle, or $500,000 i f you ’ re marr ied and f i l ing joint l y , to lower the amount .

Another reason for a reverse mor tgage ’ s appeal : tax sav ings .

Sorry, Uncle Sam As an el igible borrower , the loan proceeds you recei ve f rom a reverse mor tgage are cons idered loan proceeds , not earned income. That means the payments aren ’ t taxable*. You can opt to recei ve funds f rom a reverse mor tgage as a lump sum, monthl y payments or a l ine of credi t that ’ s avai lable i f and when you need i t . †

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Ret i rement age i s approaching , and you may be thr i l led to leave the nine- to- f i ve behind for good. But what happens when your f inances don ’ t al ign wi th the l i festy le you ’ ve been env i s ioning? WHAT TO DO WHEN YOU REALIZE YOU’RE NOT FINANCIALLY READY FOR RETIREMENT

Bot tom l ine: i t ’ s never too late to get your f inances in order . As par t of Nat ional F inanc ial L i teracy Month, here are f i ve t ips to help boost your f inanc ial wel lness .

Max out your 401(k) contr ibut ions . In January 2022, the max imum cont r ibut ion amount rose to $20,500 annual l y . I f you ’ re not al ready , take advantage of thi s easy opt ion to boost your sav ings . 50 or older? Look into catch-up contr ibut ions . Once you ’ ve reached an el igible age, you can make an addi t ional catch-up cont r ibut ion of $6,500 for a grand total of $27,000 a year . Rethink your investment style. Are you conservat i ve? Are you tak ing r i sks? As you ’ re near ing ret i rement , i t ’ s a good t ime to rev iew your investment al locat ions and speak wi th a f inanc ial adv i sor about any potent ial changes that can benef i t your sav ings goal s . Delay col lect ing Social Secur i ty. The average Soc ial Secur i ty benef i t for the 64 mi l l ion Soc ial Secur i ty rec ipients in the U.S. i s current l y $1,657 per month. But wai t ing unt i l you reach ful l ret i rement age makes i t more l i kel y that you can col lect 100% of what the government of fers .

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Cons ider a reverse mor tgage loan . Did you know that homeowners age 62 and older col l ect i ve l y own $9 . 2 t r i l l ion in home equi ty wea l th? Your home i s a unique asset . I ts va lue increases over t ime as you bui ld more and more home equi ty . So i f you ’ re l ack ing in funds dur ing your ret i rement years , a reverse mor tgage can be a va luabl e f inanc i a l tool that a l lows you to l everage your equi ty , whi l e you cont inue to l i ve in your home and ma inta in ownership . For exampl e , i f you star t col l ect ing at 62 , and your ful l ret i rement age i s 66 , you may mi ss out on 25% of your max imum benef i t every month for as long as you l i ve — and that adds up! Check out the Soc i a l Secur i ty Admini st rat ion ’ s onl ine ca l cul ator to get an est imate of your future ret i rement benef i ts based on var ious age scenar ios . You can rece i ve reverse mor tgage funds as a lump sum, a monthl y payment or a l ine of credi t that ’ s there i f and when you need i t . And unl i ke a t radi t iona l loan , reverse mor tgages don ’ t requi re monthl y payments . You can pay as l i t t l e or as much as you want — when you want . Just stay current wi th loan obl i gat ions inc luding proper ty taxes , insurance , ma intenance † ‡

Remember , ret i rement comes wi th i ts own pr i ce tag . To l i ve out your best years , you need a stabl e f inanc i a l s i tuat ion and a sol id pl an .

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They ’ re cons idered a last resor t when you have no other opt ions Thi s type of loan takes advantage of older homeowners Here are some common reverse mor tgage myths you may have heard: Did you know that Apr i l 2 was Internat ional Fact Check ing Day? Since there are so many mi sconcept ions about reverse mor tgages , i t seems l i ke the ideal t ime to lay them to rest and di scuss how reverse mor tgages can be a power ful f inanc ial planning tool — espec ial l y in today ’ s f inanc ial c l imate: FACT CHECKING REVERSE MORTGAGES

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No requi red monthly mortgage payments . You just need to stay current wi th loan obl igat ions inc luding proper ty taxes , maintenance and insurance. A growing l ine of credi t . One way to access your reverse mor tgage funds i s through a l ine of credi t that ’ s avai lable i f and when you need i t . And the best par t i s i t grows over t ime**. Improved cash f low . I f you plan to rel y heav i l y on investments for your ret i rement income, funds f rom a reverse mor tgage can help balance out your por t fol io dur ing an economi c downturn. Reverse mor tgage loans have some di st inct advantages over t radi t ional mor tgages or l ines of credi t : So what does the stock market have to do wi th reverse mortgages? A reverse mor tgage s impl i f ies the process of tapping into the equi ty you ’ ve bui l t in your home, whi ch i s l i kel y your largest buf fer asset . Thi s home- secured loan al lows you to turn par t of that home equi ty into funds you can use for any purpose, f rom unexpected expenses to renovat ions , pay ing for heal thcare or s impl y the costs of dai l y l i v ing.

In real i ty , many f inanc ial adv i sors now v iew reverse mor tgages as a smar t opt ion to be cons idered when mapping out ret i rement investment st rategies for thei r c l ients . Financial facts you need to know Amer i cans have been enjoy ing a bul l market for the last 12 years . I t ’ s been a great run, but i t won ’ t last forever . I f you ’ re planning for ret i rement , that means you need to cons ider what happens i f your invested assets don ’ t keep growing at the rate you ’ ve got ten used to. For many older homeowners , a home represents your biggest asset and the major i ty of your net wor th. A home i s what ’ s cal led a “buf fer asset ” — one whose value i sn ’ t di rect l y t ied to an index l i ke the S&P 500. I f you f ind yoursel f shor t on cash and need to create l iquidi ty in a down market , buf fer assets should be leveraged before you cash in a ret i rement account or sel l stock . By leav ing invest ible assets untouched, you ’ re gi v ing them t ime to recover at least some of thei r value as the market improves .

Ready for Next Month's Reverse Insider? You can expect to find it in your email inbox in early May. Thank You for Reading!

† Thi s mater ial has not been rev iewed, approved, or i ssued by HUD, FHA, or any government agency . The company i s not af f i l iated wi th or act ing on behal f of or at the di rect ion of HUD/FHA or any other government agency . Borrowers who elect a f i xed rate loan wi l l recei ve a s ingle di sbursement lump sum payment . Other payment opt ions are avai lable onl y for adjustable rate mor tgages . As wi th any mor tgage, you must meet your loan obl igat ions , keeping current wi th proper ty taxes , insurance, and maintenance.

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*Not tax adv i ce. Consul t a tax profess ional

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**I f par t of your loan i s held in a l ine of credi t upon whi ch you may draw, then the unused por t ion of the l ine of credi t wi l l grow in s i ze each month. The growth rate i s equal to the sum of the interest rate plus the annual mor tgage insurance premium rate being charged on your loan.

Ch a r g e s s u c h a s a n o r i g i n a t i on f e e , mo r t g a g e i n s u r a n c e p r em i ums , c l o s i n g c o s t s a nd / o r s e r v i c i n g f e e s , i f a pp l i c a b l e , ma y b e a s s e s s e d a nd w i l l b e a dd e d t o t h e l o a n b a l a n c e . A s l on g a s y ou c omp l y w i t h t h e t e rms o f t h e l o a n , y ou r e t a i n t i t l e un t i l y ou s e l l o r t r a n s f e r t h e p r op e r t y , a nd , t h e r e f o r e , y ou a r e r e s pon s i b l e f o r p a y i n g p r op e r t y t a x e s , i n s u r a n c e a nd ma i n t e n a n c e . F a i l i n g t o p a y t h e s e amoun t s ma y c a u s e t h e l o a n t o b e c ome i mme d i a t e l y du e a nd / o r s ub j e c t t h e p r op e r t y t o a t a x l i e n , o t h e r e n c umb r a n c e o r f o r e c l o s u r e . T h e l o a n b a l a n c e g r ows o v e r t i me , a nd i n t e r e s t i s a dd e d t o t h a t b a l a n c e . I n t e r e s t on a r e v e r s e mo r t g a g e i s no t d e du c t i b l e f r om y ou r i n c ome t a x un t i l y ou r e p a y a l l o r p a r t o f t h e i n t e r e s t on t h e l o a n . A l t hou g h t h e l o a n i s non - r e c ou r s e , a t t h e ma t u r i t y o f t h e l o a n , t h e l e nd e r w i l l h a v e a c l a i m a g a i n s t y ou r p r op e r t y a nd y ou o r y ou r h e i r s ma y n e e d t o s e l l t h e p r op e r t y i n o r d e r t o r e p a y t h e l o a n , o r u s e o t h e r a s s e t s t o r e p a y t h e l o a n i n o r d e r t o r e t a i n t h e p r op e r t y . ©2 0 2 2 R e v e r s e Mo r t g a g e F und i n g L L C , 1 4 5 5 B r o a d S t r e e t , 2 nd F l oo r , B l oomf i e l d , N J 0 7 0 0 3 , 1 - 8 8 8 - 4 9 4 - 0 8 8 2 . Comp a n y NML S I D : #1 0 1 9 9 4 1 . F o r l i c e n s i n g i n f o rma t i on , g o t o : www . nm l s c on s ume r a c c e s s . o r g . A r i z on a Mo r t g a g e Ba n k e r L i c e n s e #0 9 2 7 6 8 2 ; L i c e n s e d b y t h e De p a r tme n t o f F i n a n c i a l P r o t e c t i on a nd I nno v a t i on und e r t h e C a l i f o r n i a R e s i d e n t i a l Mo r t g a g e L e nd i n g A c t ; L o a n s ma d e o r a r r a n g e d pu r s u a n t t o a C a l i f o r n i a F i n a n c i n g L aw l i c e n s e ; Ge o r g i a Mo r t g a g e L e nd e r L i c e n s e e #3 6 7 9 3 ; Ma s s a c hu s e t t s Mo r t g a g e L e nd e r L i c e n s e #ML 1 0 1 9 9 4 1 ; L i c e n s e d b y t h e New J e r s e y De p a r tme n t o f Ba n k i n g & I n s u r a n c e ; L i c e n s e d Mo r t g a g e Ba n k e r - NY S De p a r tme n t o f F i n a n c i a l S e r v i c e s - i n - s t a t e b r a n c h a dd r e s s 7 0 0 Co r po r a t e B l v d , Newbu r g h , NY 1 2 5 5 0 ; Rhod e I s l a nd L i c e n s e d L e nd e r . F o r C a l i f o r n i a c on s ume r s : F o r i n f o rma t i on a bou t ou r p r i v a c y p r a c t i c e s , p l e a s e v i s i t h t t p s : / / www . r e v e r s e f und i n g . c om/ p r i v a c y . No t a l l p r odu c t s a nd op t i on s a r e a v a i l a b l e i n a l l s t a t e s . T e rms s ub j e c t t o c h a n g e w i t hou t no t i c e . C e r t a i n c ond i t i on s a nd f e e s a pp l y . T h i s i s no t a l o a n c omm i tme n t . A l l l o a n s s ub j e c t t o a pp r o v a l .