Closing in on retirement means deciding how you’re going to make the most of the money you have saved and how to invest to make more money. There are several great investment options for people in retirement, such as treasury bonds. Unfortunately, though, there are several bad investments, too.
Here are 8 investment moves you shouldn’t make after retirement
1) Reverse mortgage
To some retirees, a reverse mortgage seems like a good investment. You borrow money against the value of your home, assuming it is paid in full (in most cases). However, once you read the fine print, you’ll soon find out it’s not all it’s made out to be.
The selling points for some people are that you don’t need to have an income, in some cases you don’t need good credit, and you don’t have to start paying off the mortgage until after you’ve moved out of your home or once you die. Look closer, though, if you’re considering this option. Since you don’t need an income and the credit requirements are low, your lender will charge high fees and interest rates. In fact, the total amount of money you end up getting through a reverse mortgage is usually surprisingly low.
Additionally, if you do pass away before the loan is paid off, the bank will own your house and you will not be able to pass down its ownership to an heir.
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