3 Financial Moves to consider if you're over 60
It's no secret that as we age, our financial needs and priorities change. And while some older adults are lucky enough to have significant savings or a healthy pension, others are worried about making ends meet.
If you're over 60 and facing retirement or already retired, you may be wondering what your options are for accessing extra cash. Here are three possible solutions: taking out a loan from your 401(k), selling property outright, or getting a reverse mortgage.
Each option has its own set of pros and cons, so it's important to do your research and speak with a financial advisor before making any decisions.
Taking out a loan from your 401(k)
If you have a 401(k) plan through your employer, you may be able to take out a loan against your account balance. The biggest benefit of this option is that you're borrowing from yourself, so the interest rates are typically lower than those of a traditional loan.
However, there are some downsides to consider as well. For one, if you leave your job for any reason, you'll likely have to repay the loan within 60 days or it will be considered a withdrawal and subject to taxes and penalties. Additionally, any money you borrow is no longer invested and has the potential to grow, so you could end up losing out on potential earnings.
Selling property outright
If you own a home or other property, you may be able to sell it and use the proceeds to supplement your income. This option can be especially beneficial if you have equity in your home and can get a good price for it.
However, there are a few things to keep in mind before selling. For one, you'll need to find somewhere else to live, which can be difficult and expensive, especially if you're downsizing. Additionally, you may not want to part with your home or property, especially if it holds sentimental value.
Getting a reverse mortgage
A reverse mortgage is a type of loan that allows homeowners to borrow against the equity in their home. The biggest benefit of this option is that you don't have to make monthly loan payments as long as you live in your home. Additionally, the loan doesn't have to be repaid until after you die or sell your home.
However, there are some drawbacks to consider as well. For one, reverse mortgages typically have high fees and interest rates. Additionally, the loan amount can eat away at your equity, leaving your heirs with less money when you die.
No matter what your financial situation is, it's important to carefully consider all of your options before making any decisions. Speak with a financial advisor to get help understanding your options and make the best decision for your unique circumstances.