Reverse Mortgage Funding, LLC (RMF) has announced the availability of two new, digital Social Security guides for 2021. One is designed to help consumers maximize retirement benefits, while the second aims to support planning professionals in better serving the long-term financial goals of their clients. By spearheading education on this important topic for retirees, it is hoped that more seniors will consider options that can include a reverse mortgage in a holistic financial plan.
The guides cover a number of different topics related to the Social Security program, including major changes in recent years to its policies. Both guides were edited by Kurt Czarnowski, former regional communications director for the Social Security Administration (SSA) in the New England region of the United States.
“Social Security’s retirement program has been a basic part of American life for more than 85 years. But, despite the age, the size, and the economic impact of the Social Security system, the myths, and misunderstandings about what the program is, as well as what it isn’t, are sizable,” said Czarnowski in a statement announcing the guides’ publication. “The public must understand what benefits may be available to them and how to maximize their benefits, which is why I have partnered with RMF to publish these guides each year—they understand the importance of educating the public on all aspects of retirement planning.”
Education and capturing conversions
This marks the fourth consecutive year that RMF has published these guides, and they have proven to be a valuable tool for its customer base of seniors as well as in the lender’s ability to increase awareness of the reverse mortgage product category according to Richard Thorpe, national sales leader of RMF’s distributed retail channel.
“Social Security is a very complex system, and navigating the policies and laws associated with claiming strategies (especially those established by the Bipartisan Budget Act of 2015) can be difficult for any of us to understand, regardless of age,” Thorpe tells RMD. “These guides are the result of painstaking work and research to present the many aspects of Social Security in an easy-to-follow and palatable way for both consumers and financial professionals because knowledge is power when it comes to maximizing Social Security benefits.”
Readers of the guides are also encouraged to consult with their own tax or legal professionals on any specific impacts the information could have on their own situation, but it’s also hoped that education about this topic can help a retiree to think more seriously about other components that could affect their financial security in later life, he says. This includes the possible employment of a reverse mortgage loan.
“We have found that providing older Americans with a wide range of educational content dedicated to their financial well-being helps them to examine their retirement income planning from a holistic standpoint, and consequently, leads to an open dialogue with our loan specialists on adding home equity to their retirement plan,” he says. “Over the last four years, we have distributed thousands of Social Security guides to consumers (and financial professionals) with the primary goal of educating them on this vital monetary lifeline. In doing so, we’ve also made them stop and ask themselves whether or not they will have enough to retire.”
Social Security and post-pandemic retirement income planning
As many seniors who avail themselves of a reverse mortgage loan do so because of some kind of financial need — regardless of the level of wealth a senior may have — ensuring that existing and potential reverse mortgage customers are keeping Social Security in mind for their financial plans is an important component in ensuring financial security for older Americans, Thorpe says. The importance of literacy on this topic has only been enhanced by the COVID-19 coronavirus pandemic.
“The pandemic has caused increased market volatility and has placed an ongoing spotlight on the national healthcare system,” he says. “Consequently, more and more older Americans are reexamining their retirement income strategies and the expenses associated with their current and/or possible long-term healthcare needs. We know that Social Security is a critical component of many retirees’ incomes.”
Adding Social Security to a plan can be an important step to take, but it may not cover everything that a senior wants. This is where education about additional options like a reverse mortgage becomes all the more important, he says.
“We want to make sure that they have the information they need to help maximize their [Social Security] benefits and create a strategic plan for their retirement when Social Security benefits will not provide them with enough financial security,” Thorpe says.
Creating reverse mortgage proximity to Social Security
The incorporation of Social Security benefits into the retirement plans of the reverse mortgage demographic helps to emphasize the role and importance of what is, for many older Americans, a major component of a given financial situation.
“Since 2018, these Social Security guides have acted as a supplemental springboard for my income planning conversations at the beginning of each year with customers and financial planners,” said Christian Mills, reverse mortgage specialist for the financial planning channel at RMF.
By placing a reverse mortgage lender into a major role in the education of and advocacy for more holistic financial planning on the parts of seniors, it could help to illuminate why a reverse mortgage could end up working beneficially for a senior who may not have previously considered such a product, Mills explains.
“By creating these types of valuable educational assets, alongside free webinars, blogs, etc., RMF opens the door for their sales teams to create a meaningful dialogue with older Americans and their trusted financial advisors who may not realize that a reverse mortgage can work hand in hand with other aspects of income planning (like Social Security) to build a more secure retirement,” he says.
Placing Social Security and reverse mortgages next to each other in retirement planning conversations helps potential clients to understand the potential benefits that an option like the tapping of home equity can provide, Thorpe says.
“When we begin to educate a new customer (or financial professional) on reverse mortgages we always bring the other aspects of retirement income planning—like Social Security—into the conversation,” he says. “We feel it is important for borrowers to look at the financial tools available to them as a whole and consult with related professionals accordingly.”
Education is key
In order to facilitate more activity within the reverse mortgage industry, education must remain a top priority alongside transparency and facilitating awareness about senior finances in all aspects of retirement planning, Thorpe says.
“It behooves us all to educate our customers and their trusted financial advisors on topics like Social Security, tax planning, Medicare, etc. whenever we can—with the help of field experts—because a well-informed consumer will be able to look past the misconceptions of reverse mortgages to better understand how they work in concert with other aspects of retirement planning like Social Security,” Thorpe says.
The consumer guide is available online, while the financial planning guide is available from RMF’s planner education website.