Q: I am 54 and want to have income in retirement. I'm interested in reverse mortgages. Can you explain them?
A: Reverse mortgages are only available to residential homeowners who are at least age 62. Normally, they are not available to those who currently have an outstanding mortgage balance. Because they can be expensive in terms of closing costs, they are best for those who plan to remain in their home for at least five years.
These loans allow the homeowner to receive payments in a lump sum or monthly, or even as a line of credit. The loan is repaid with interest upon the sale of the house or death of the homeowner.
Q: I am employed full time-I have a 401(k) and IRA. Will I have to pay taxes on these accounts when I retire?
G.B., 65, Orlando
A: At age 70 1/2 you will have to withdraw your required minimum distribution from these accounts. And, yes, the amount you withdraw will be taxable at your ordinary income rate.
Have a question? E-mail firstname.lastname@example.org. Include your name (only your initials will be printed), hometown and phone. Questions are answered by certified financial planners from the Central Florida chapter of the Financial Planning Association. Answers are for educational purposes only; you should also consult a financial professional. Questions and answers may be edited for space considerations.