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Reverse mortgages can be a "great tool," Bankrate says 2010-01-15 Reverse mortgages can be useful to seniors looking to shore up their retirement income, Bankrate.com reported this week. Steve Bucci, a debt expert with the personal finance website, adds that reverse mortgages let older people "stay in their homes long after they would have otherwise had to move," making them a potentially smart choice for seniors who have a large equity stake in their houses. Yet, Bucci says, some people may be so swamped in debt that even a reverse mortgage doesn't solve their problems. People mired in credit card debt - Bucci gave the example of a couple in their eighties owing $20,000 - can benefit from proactive money management. First, Bucci said, people should try to negotiate with their creditors to lower their interest rate. Doing so could save hundreds a month on high-rate debt. The second step Bucci recommended was to hire a professional intermediary - either a credit counseling agency or an attorney with expertise in bankruptcy. What people shouldn't do, Bucci cautioned, is walk away from their debt. Paying off debt should be an important component of anyone's retirement plan. In a recent Bank of America survey, 41 percent of retirees advised people with at least 15 years to retirement to pay down their debt. Doing so could provide for a long and stress-free retirement.  |
