Reverse Mortgage Information

With the fall of the stock market, the retirement investments of senior Americans fell dramatically. The EBRI (Employee Benefit Research Institute) has calculated that the average 401-K account balance fell by nearly 20% for workers above age 55.

Almost 43% of older workers had said that they had less than $50,000 saved for retirement. With interest rates being low in the present market, the AARP reported that during the year 2008, about one in five workers aged 45 stopped further investments into their retirement accounts.

Here are a few ways to manage the finances during your retirement, known as retirement planning or financial planning for retirement.

1. Use retirement contributions. You can also claim tax credit for retirement contributions. You can use the Saver’s Credit to claim 10% to 50% of your contribution, depending on income levels and that will be in addition to the tax deductions for the contribution.

2. Get $250 credit in social security payments. Each taxpaying retiree including veterans, will receive a one-time Economic Recovery payment of $250, in addition to the usual social security benefits.

3. Use Make Work Pay Credit. Workers are eligible for a $400 tax credit for 2009 and 2010. This amount is credited into paychecks after April 1.

4. There are tax breaks on new car purchases. So use them to your advantage. If you are getting a new car, then you can deduct the 6% state sales tax on the purchase price.

5. Consider home refinancing. While you are still earning, consider taking a refinance, in this way you can shorten the payment term to 15 years or even 7 years.

6. Purchase a new home. Home prices have dropped with the onset of the economic recession. In this situation, first-time homebuyers may be eligible for a tax credit of up to $8,000 on a new home purchase.

7. Find mortgage help. If you are facing trouble re-paying a loan, you can visit makinghomeaffordable.gov to learn about options for help.

8. Consider taking a a reverse mortgage loan. This is a very good option to go for, the reverse mortgage, which is also known as the HECM (Home Equity Conversion Mortgage). With a reverse mortgage, senior home owners above the age of 62 can borrow money against the value of their home and the amount does not have to be repaid until the home is sold or the senior passes away. The loan limit for HECM has recently been increased by the Government to $625,500. HECM loans may not be for every one, and obtaining guidance and counseling is a must.