A friend of mine has a crystal ball sitting on his desk, and taped to its base is a sign that reads, “Temporarily Out Of Service.”
Too bad – because right about now most of us could really use a crystal ball.
Most financial professionals agree that planning for our future is as much art as it is science, and that determining how much money we’ll need to get us through the golden years is akin to trying to predict the future.
This said, however, there is general consensus on what doesn’t work.
The Scarlett O’Hara Approach, or Hope Is NOT A Strategy
Scarlett O’Hara might have been very surprised to learn her approach to bad news – “Tomorrow is another day” – has a name. Optimism bias, also known as unrealistic optimism, is a common trait that causes people to believe they are at low risk of experiencing a negative event. Adolescence is heavily associated with optimism bias, a bias that frequently leads to an increase in risky behaviors. In the medical realm, optimism bias causes individuals to put off measures that contribute to good health.
And for many, optimism bias causes us to believe financial matters will get better on their own as we head into retirement.
Rick Gow, wealth management advisor with Lara, Shull, and May in Falls Church, Virginia, says, “A measure of pessimism is not bad when you’re planning for retirement. You can’t just ‘hope’ you’re going to have enough to get you through the most expensive years of life. A plan is of paramount importance.”
With life expectancies now extending into the 90’s, most of us are eventually going to draw upon every savings “bucket” we have available. And that’s where the FHA Reverse Mortgage comes in.
Reverse Mortgage was never intended to be a replacement for a sound financial retirement plan. However, it can play an important role in augmenting what is already in place, and slow the burn-through rate on investments and other retirement instruments.
If you, or someone you know, would like to look into the potential benefits of a reverse mortgage, give me a call. I always love hearing from you.
Laurie Denker MacNaughton [NMLS# 506562] · Reverse Mortgage Consultant · Middleburg Mortgage, a Division of Middleburg Bank · 20937 Ashburn Road, Suite 115 ·Ashburn, Virginia 20147 · 703-477-1183 Direct · LMacNaughton@MiddleburgBank.com · www.middleburgmortgage.com/lauriem
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