March-April 2021

In Reverse Plan B Always Starts With a Plan A For Me, Retirement Has Been Around the Corner for Decades By Thomas A. Barstow THE FIRST SNOW of the season fell while I was working at home. From my favorite chair, I took a few minutes to marvel at the city park outside my window. The park is beautiful year-round because of its tall oaks and a historic bandstand, where in warmer months the local orchestra might give a free show. The snow quickly blanketed every- thing, adding to the allure. Those moments suddenly became a metaphor, espe- cially because I was planning this edition of Reverse Mortgage magazine. As stunning as that storm was, it also was a reminder that I was glad to be inside, sipping a hot coffee, comfortable in the nest that I created when I still was a young man. I wondered if it would be possible for me to continue to enjoy this spot forever. I thought about my Plan A for retirement and my backup plans, and how home equity might become a sound Plan C, if my luck and my health hold out. Steve Vernon, an accomplished author on retirement and teacher at Stanford, talks about backup plans in the cover story in this edition. He has seen all too often when people don’t give enough thought to retirement, more or less whether they have contingencies in place. In this issue, we provide an overview of the status of what is primarily Plan A for most Americans—Social Security and Medicare. But what happens if life throws you a curve, and you are forced into early retirement, well before the age of 65 for Medicare? For Social Security, a prime age target is 62, which is when someone can get a HECM. What would happen if you were forced out of work before that age milestone? Vernon notes that is all too common. Would a proprietary reverse mortgage create a bridge between that lower age and 62? What is the bridge to 65 for Medicare? Or, in the best sce- nario, what if you just want to enjoy your earlier years of retirement by taking a few trips or doing home improve- ments or engaging in hobbies, all of which might need to be financed? How do you make the numbers work? As the various experts point out, retirement plans are as individual as snowflakes. Too many variables are at play involving income, marital status, family situations and health to make generalizations that would satisfy everyone. In Reverse continued on page 4 REVERSE MORTGAGE / MARCH-APR I L 2021 3