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More Affluent Retirees May Find HECMs a Money Saver
It appears that the potential strategic applications of the Home Equity Conversion Mortgage in retirement are as limitless and creative as the professionals who embrace the product. Case and point: using a reverse mortgage to avoid Medicare high-income surcharges.
A recent article in Investment News by Katy Votava brings to light an interesting twist for higher-income individuals. Why would those with considerable income and assets even consider a reverse mortgage? Beyond the flexibility of using the HECM line of credit to prolong their portfolio is the advantage of possibly eliminating costly Medicare high-income surcharges. That’s correct, if Uncle Sam determines you earn too much you get to pay more for your Medicare part B and D coverage and premiums with no additional benefits. The scale used to determine the income thresholds was recently modified lowering the top three tiers.
The surcharges uses the modified adjusted income or MAGI from the tax refund filed two years prior. This means that 2018 premium surcharges will be based on…
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