My parents are nearing retirement and don’t have a lot in investments. I’ve gotten them on a budget this year and they are on track to clear all their consumer debt by the end of 2021. They are selling one of their homes and will have about $200k in proceeds.
I want them to put it all on their $300k Mortgage on their primary residence and then refi to a low monthly payment and interest rate for 30 years. My goal is to help them reduce their monthly obligations to live within their means at their lower fixed income upon entering retirement.
They consulted with a financial planner, who obviously holds more credentials than I, and they advised my parents to invest heavily and do a reverse mortgage on their primary home.
This freaks me out but I don’t know enough about reverse mortgages to be able to speak to the pros and cons in their situation. I just know that they could be fine if we continue down the path we started. Is it a bad idea to start investing in their 401k when they’d have to draw on it in less than 5 years?
How do I help them make the best decision for their retirement years?