Retirement Income
For many Americans, a large part of their income goes toward making their monthly mortgage payments. As a result, they may be underfunding college savings, retirement plans, and other long-term financial needs. Over time as they grow older, a large part of their net worth is in their home equity. But home equity is locked away, unusable, unless you sell your home or borrow against home equity incurring additional debt through home equity lines or costly reverse mortgages.
Now, an EARN lets you unlock some of your home equity – without having to move – and use that value to save for other long term financial goals.
Baby Boomers – Through an EARN, a homeowner can convert home equity into other investments to better ensure future retirement income.
Retirees – Rather than initiating a costly reverse mortgage or selling a home outright, an EARN may be used to fund an immediate income stream such as a mutual fund with systematic withdrawals or an annuity with lifetime monthly payments.
College Funding – Homeowners with sufficient equity can obtain an EARN to fund a 529 plan for college without cash flow strain.
Illustration – Retired Couple
With an EARN, this couple can convert a portion of their home value into cash for the investments in mutual funds and/or annuities to create an additional $17,000 annual lifetime income.
| Appraised Home Value | $400,000 |
|---|---|
| EARN Amount Received | $200,000 (50% of home value) |
| Annual Social Security Income | $18,000 |
| Conversion of EARN amount into lifetime income* | $17,000 |
| Total Annual Income (with Social Security) | $35,000 |
| Additional Debt (unlike a Reverse Mortgage) | $0 |
Next: How do I get an EARN?
*$200,000 can be used to supplement income through a variety of financial products including mutual funds and/or annuities. The illustrated $17,000 is an estimate only. Income will vary based on product selection, investment returns and other factors.