Retirement Funds Integrator (RFI)

Enter the following information to see a chart depicting how a HECM and annuity can be used in combination to help fund your retirement.

Retiree's Birthdate (ex: 3/15/1940)
Retiree's Gender
Spouse's Birthdate (ex: 3/15/1940)
Spouse's Gender
Annual Increase in Spendable Funds

Financial Assets	$
House Value	$
House Zip Code
Existing Mortgage Balance	$
Rate of Return on Financial Assets (ex: 4.0)		%

Not sure how to use this tool?
Watch our instructional video.

Earning Interest on Financial Assets

Since you have significant financial assets for your retirement plan, you can enter a positive rate of return on those assets. If you leave the rate at zero, in all probability you will have excess financial assets and/or HECM credit line at the end of 10 years when the annuity payments begin. You can view that as a bonus that you can use in any way you see fit.

If you enter a rate of return above 0%, your spendable funds line will be higher. However, if the realized rate of return turns out to be lower than the rate you enter, your spendable funds will dwindle until the annuity begins. The annuity amounts will not be affected by a rate shortfall.

Additional Details

RFI uses a portion of your financial assets and/or your HECM borrowing power to purchase a deferred annuity; you draw on the remaining portion of your assets / HECM Credit Line during the deferment period to fund your spending needs. Of course your outstanding financial asset balance earns a rate of return during the deferment period, and your HECM Credit Line grows at a rate equal to a market interest rate + the margin on the HECM + the MIP on the HECM (the latter two are fixed in the HECM contract and cannot change).

In order to be as conservative as possible to minimize the risk of running out of funds/credit line during the deferment period, the RFI plan presented here assumes that your rate of return on financial assets will be zero during the deferment period, and the market interest rate on the HECM will also be zero during the deferment period. Of course this is very unlikely; in all likelihood rates will be greater than zero, in which case you will have excess financial assets and/or HECM credit line at the end of the deferment period which you can use in any way you see fit.

Additional Details

Relative to the amount of home equity that you have, your financial assets are too low to use this plan..

Rate of Return: Enter the annual rate of return you estimate your financial assets will earn. A low estimate reduces your risk of falling short of funds before annuity payments begin. For complete safety, enter 0.

Financial Assets: For simplicity, taxes are not taken into account here. In some circumstances (particularly if a substantial portion of your financial assets are in traditional IRA / 401k accounts) the tax status of your financial assets can have a significant impact on how an RFI plan is structured. If you proceed, you should consult your Mortgage Professor representative regarding the tax implications of any retirement plan.

This section of the chart shows monthly annuity income, which begins in 0 years at and increases by 2% a year. You pay for the annuity now with part of your assets, in exchange receiving an income stream for life starting in 0 years. The remainder of your assets will be used for spendable funds during the 0-year annuity deferment period.

In your case, of your financial assets are used to purchase the annuity.

RFI selects the Deferred Income Annuity that results in the highest monthly income from a network of annuity companies rated A or higher by AM Best. Click the 'Annuity Pricing' button to see how RFI’s automated shopping can increase your annuity income.

During the 10 year annuity deferment period spendable funds are provided by a combination of a HECM Term Payment and draws from your remaining financial assets. The blue area of the chart is the 10 year HECM term payment, which in your case is per month.

RFI uses a network of HECM reverse mortgage lenders to find the best “price” for the reverse mortgage. Click the 'HECM Pricing' button to see the range of term payments that are available on the network – RFI automatically selects the lender offering the largest term payment.

HECM term payments are augmented by draws from your remaining financial assets () to provide spendable funds during the early years of the plan – this is shown in the red section of the chart. Spendable funds grow at 2% per year and provide a smooth transition to the start of annuity income in 10 years.

Example Data

This is the sample chart for Jack Jones. Using the input fields below, enter the values for your situation to see a chart specifically for you.

Tip

You can place the cursor over the chart to view the chart values.

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Annuity Pricing

HECM Pricing

Walk-Through Tutorial

The walk-through tutorial can be used once you are viewing your RFI Retirement Plan.

The RFI generated chart above is one possible retirement plan for you, but it is not necessarily the best plan possible.

A different annuity deferment period might result in more spendable funds.
You might prefer a pattern of spendable fund that changes over time (i.e. differs from the annual 2% increases shown in the chart).
You might want a rider on your annuity that provides a refund of premium in the event of early death.
The graph does not show changes in your estate value, which might be important to you.
Tax consequences (including whether some or all of your financial assets are in ordinary or tax deferred accounts) are not taken into account.

These or other issues involved in designing a plan that best meets your needs can be discussed with a Mortgage Professor representative who has access to the full RFI technology.

Need Help?

There are two ways you can receive help from The Mortgage Professor or one of his counselors. You can request someone to call you or you can send a question and someone will email you the answer.

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