Don't Save Too Much - HECMWorld.com

Don’t Save Too Much

by Shannon Hicks
| One Comment
| September 10, 2018

Government rules for retirement savings contradictory

If there’s one thing our government is known for it’s talking out both sides of its mouth. While repeatedly sounding the alarm that Americans are not saving enough for retirement federal laws currently limit just how much we can contribute to our retirement savings. 2018 maximum IRA or Individual Retirement Account contributions are capped at $5,500 per individual, $6,500 if you’re over the age of 50. What happens if one saves more than their allowed to their IRA? Uncle Sam will penalize savers with a 6% tax penalty for each year the funds remain in the account. The message is clear, save for retirement but not too much. Ironically current government limitations on retirement savings only stymie retirement preparedness while at the same time the need for retirees to tap their home equity increases…

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Editor in Chief: HECMWorld.com

As a prominent commentator and Editor in Chief at HECMWorld.com, Shannon Hicks has played a pivotal role in reshaping the conversation around reverse mortgages. His unique perspectives and deep understanding of the industry have not only educated countless readers but has also contributed to introducing practical strategies utilizing housing wealth with a reverse mortgage.

Shannon’s journey into the world of reverse mortgages began in 2002 as an originator and his prior work in the financial services industry. Shannon has been covering reverse mortgage news stories since 2008 when he launched the podcast HECMWorld Weekly. Later, in 2010 he began producing the weekly video series The Industry Leader Update and Friday’s Food for Thought.

Readers wishing to submit stories or interview requests can reach our team at: info@hecmworld.com.

1 Comment

The Positive Realist
September 10, 2018 at 11:15 am
Shannon,

I strongly disagree about who pays for the HECM losses in the MMIF. The US Treasury does not pay UNLESS the total balance in the MMIF is negative. Otherwise the surplus in the forward mortgages in the MMIF pays for HECM losses.

As of 9/30/2017 the surplus in the forward mortgages in the MMIF exceeds the HECM losses and also is sufficient to meet the Congressional mandate for reserves which is 2% of the insurance in force as of fiscal year end.

So basically what I am saying is that those who are responsibly paying outrageous MIP on their forward mortgages are doing that so the HECM program can be available to seniors. That stinks.
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