This is an interesting book that suggests that it might be advisable to continue to have debt into retirement.
There are three types of debt
There is oppressive debt, working debt, and enriching debt. The author advocates the people preparing for retirement should have debt, but only enriching debt. The preferred enriching debt is a line of credit against your investment portfolio. He advocates that financial planners are doing their clients a disservice by not including debt in the equation.
He includes mortgages in the working debt category although he suggested it might be best for borrowers to keep a mortgage as long as the payments are low and the cash outflow is kept to a minimum.
On reverse mortgages that have no principal and interest requirement, which are only available to persons age 62 and older, he says it’s real complicated and because of all the government regulation it is not easy to talk about them. He does mention that it’s not smart to pay off a monthly payment mortgage and then turn around and borrow the money back from a reverse mortgage that has no monthly payments, presumably because of the fees and costs of getting a new reverse mortgage. He says keep the regular mortgage until you can’t make the payments any more. The problem that he is not addressing is that when getting a reverse mortgage the borrower needs to show the ability to pay for property taxes, insurance and maintenance. After retirement, the borrower might not have that income anymore and not be able to make the mortgage payments, not qualify for a no payment reverse mortgage, and maybe even have to sell their home. He also misses the point that potential reverse mortgage borrowers are required to go to financial counseling to see if it is a good fit for them.
Bottom-line: Prudent people need to do some pre-retirement financial planning that not only considers their financial assets, but also their home, and their debts.
Make a Legacy
Besides discussing debt this book it has several good guides and tips for people wanting to leave a legacy in their name, suggesting that they start giving while they are still alive.
The “ROI” of Retirement
This book also helps to provide a road-map in planning and managing the “ROI” of retirement: (1) Resource Management – money, investments, cash flow, balance sheet management, insurance, and property; (2) Outer Pragmatics – real-world concerns, medical and health issues, residency issues, long-term care, and estate planning; (3) Inner Dynamics – meaning and purpose, community and relationships, fun. It includes recreation, hobbies, travel and bucket list, service and charitable goals, the pleasures in life.
I recommend this book to people smart enough to consider their retirement needs and their financial planners. You can get this book on Amazon.