Reverse mortgages and retirement risks


By Alain Valles, CRMP

If you’re approaching retirement or hopefully enjoying retirement, there may be a nagging concern of have you done everything possible to minimize your financial risks?  Whether you have professional advisors, do your own planning – or perhaps worse, ignore the entire topic – below are economic areas that can affect your quality of life once you stop working:


Fortunately for people living on fixed income or Social Security, inflation rates have been low for the past several years, but we have had times with inflation well over 8 percent.  A $2.50 gallon of milk today will cost $5.03, just over double, with an inflation rate of only 3.5 percent over 20 years. Does your financial retirement plan cover inflation risk?

Timing of Retirement

Planned or unplanned? As Allen Saunders was quoted – “Life is what happens to us while we are making other plans.” Studies show that approximately 49 percent of people are forced to retire earlier than planned and, of this group, 78 percent retired due to health or job-related termination. The result is less time to accumulate retirement savings and higher healthcare costs.


People are living longer. The financial challenge of aging is once someone lives beyond 80 years old, the cost of staying healthy increases significantly. Are you financially prepared to be one of the over million centenarians expect by 2050?

Rule of 219

We all need to eat! This is a “fun” math trick I learned from a financial planner friend:  For a couple with a life expectancy of 20 years and a $5 per meal budget, all you need is $219,000. Twenty years x 2 people x 365 days x three meals x $5 per meal = $219,000.  What happens to your plan with inflation, higher cost meals, living long than 20 years?

Loss of spouse

Being happily married for over 31 years, I can’t fathom the grief when my clients lose their partner. There is often the loss of their income. Does your plan cover this inevitable fact of life?

Other financial circumstances

The limitless list of financial demands includes adult children and grandchildren needing money, getting divorced, real estate taxes, house repairs, paying a mortgage, credit cards, and medical expenses.

Not all doom and gloom

Hopefully your situation and plan will cover the above financial risks, but perhaps you just wish you had a few extra dollars to simply have fun. “The journey is the destination.”- Dan Eldon. Perhaps the goal is not to live to 100 but to enjoy life getting to 100. Does your plan allow you to afford to have some fun?

The good news

The good news is if you are 62 years old or older and own a home with some equity then you may qualify for a reverse mortgage that will help mitigate the financial risks of retirement, give you better peace of mind, and afford you cash to enjoy life. A reverse mortgage is not for everyone, but everyone should learn how they work.

Take the first step to learn if a reverse mortgage will augment your retirement plan.  Contact me for your free copy of the consumer booklet published by the National Council on Aging called, “Use Your Home to Stay at Home.”

You’re invited to call me at 781-724-6221 and I’ll be happy to personally answer all your questions.

Alain Valles, president of Direct Finance Corp., was the first designated Certified Reverse Mortgage Professional in New England. He can be reached at 781-724-6221 or by email at [email protected] or visit