How Generation X Can Plan Ahead for Retirement with a Reverse Mortgage

After the economic recession that lasted from 2008 to 2012, many baby boomers turned to Home Equity Conversion Mortgages (HECM) to supplement their retirement income. The FHA-backed mortgage loan products allowed retirees 61 years of age and older to tap into their home equity to provide a sense of financial security or to meet their financial goals. While baby boomers are still the only age group eligible for HECM reverse mortgages, the next generation, Generation X, isn’t far behind and they could be eyeing reverse mortgages as a retirement planning tool.

Generation X

Gen Xers are those born from 1965 to 1980 and are often characterized as independent, resourceful, and self-sufficient. Those characteristics are probably what saw them through the same recession period. In 2018, 65.8 million Gen Xers contributed to the U.S. workforce, and were hit hardest by the financial crisis of ’08. But with a more diversified financial portfolio and rising home equity levels, they were able to bounce back.

Another characteristic of Generation X is their propensity to place a high value on balancing their work with their personal lives. For this reason, many would like to retire early. But, no different than any other generation, most fear that they will outlive their savings. A reverse mortgage could be a smart financial option for this next generation. By using a reverse mortgage as a retirement planning tool, Gen Xers can bridge the gap between collecting social security and drawing on their investments by tapping into their home equity first to help extend their retirement nest eggs.

Learn more about how people are using home equity conversion mortgages for purchasing homes: