Social Security Insecurity

Social Security & an IPA

Pressing The Reset Button: The Gap Years
As human lifespan climbs steadily towards the century mark, Social Security is only one — and woefully inadequate — means of funding a lengthening retirement period. In fact, we’re in the midst of creating second-stage work lives, or “encore careers,” that are evolving at the intersection of money, meaning, and social impact, says social entrepreneur Marc Freedman, author of The Big Shift: Navigating the New Stage Beyond Midlife

Adults 60 and over are returning to school in droves to train in entirely new areas, often centered around social issues such as the environment, health, education, and social services. Educational innovation, from lifelong learning to distance classes via the Internet, is proliferating to keep pace with this changing demographic. But where are the resources to pay for this transition training?


Retirement And Individual Purpose Account

Enter the Individual Purpose Account (IPA). Freedman suggests that rather than raid your IRA or your children’s college fund, why not create a tax-advantaged Individual Purpose Account targeting the transition years? Such accounts “could be both a policy opportunity and a potential bonanza for the private sector, which is offering retirement products but little in the way of savings vehicles for alternative approaches to the last two, three, or four decades of life.”

Reverse Mortgage Retirement Funding

Until such time as the government implements this visionary idea, a reverse mortgage might be an optimal resource to fund an IPA — especially because reverse mortgage holders can tap their loans only when needed, prudently saving the rest.

In fact, reverse mortgages can be reimagined as “seed capital” to help people invest wisely in the next stage of their lives, whether that involves expanding their education to enter an encore career, using a lifetime of accumulated knowledge and wisdom to consult or mentor, traveling, writing a book, or any combination of the above, and more. “Reverse mortgage” accurately describes this dynamic demographic, who are reversing expectations of retirement and reimagining what the next stage of life looks like!



Dick Diamond February 26, 2019 at 7:22 am

Good insight into the retirement needs. However one thing that has become more apparent as we Americans are living longer is that there are perhaps two stages of retirement: One is for the younger retirees up to about age 75 and those who are older than that. The energy level, social needs, ability to drive, and health considerations may all change and need to be addressed differently.

In keeping with the aging process, financial considerations change as well from aging in place to other possibilities such as moving in with a relative or roommate to a Senior Living facility. Planning in advance for these variables is a must for continued happiness, and HECM mortgages are a wonderful solution for so many and is so misunderstood. Financial planners should make this a priority item to be discussed along with investments.

Greg Cook February 26, 2019 at 8:59 am

Amara, nice idea. The more creative we can be in the uses of reverse mortgages the more customers we’ll be able to reach. The retirement IPA not just another craft beer.

Melinda Hipp, CRMP February 26, 2019 at 2:02 pm

It’s funny as I was just musing over this very thing last night, among many other needs that aging adults have in this era. One thing worth mentioning also is dealing with the financial needs when one spouse has to stop or curtail work when the other spouse has a medical issue. My husband or 60 has been down for 4-5 weeks with an inured disc in his back. Not ONLY am I having to do double chore duties at home, but it also is keeping BOTH me and him from working fulltime hours. So it’s not just a ONE time hit but a DOUBLE does of hits. We don’t build this dollar amount into our thinking with long-term disability etc. You have to even have MORE money saved to take care of these situations than you think. I am considering putting a “team” of like minded professionals together in one building to be able to serve VARIOUS needs of our clients and be able to mobilize on behalf of a client if needed. Sort of like “The Practice” medical show (but without all the love/hate relationships.) Reverse Mortgages is just one part of the solution.

James E. Veale, CPA, MBT March 3, 2019 at 11:03 am

If someone is 60, they can raid their IRA to do all of the things Ms. Rose advocates. As a CPA, I see no financial benefit to the US Treasury from IPAs. In legislative parlance tax benefits are government expenditures.

What is the benefit to the US government if it gives tax benefits so that older citizenery can take trips or obtain new education in Green related foelds for those with limited.futures based on limited work careers once the education is completed?

I’m far more convinced that the recent tax cuts are justified than IPAs to the extent presented in the article above


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