DO YOU RECEIVE ASSISTANCE UNDER ANY GOVERNMENT PROGRAMS THAT ARE BASED ON YOUR CURRENT INCOME?
A reverse mortgage does not affect regular Social Security or Medicare benefits. However, if you are on Medicaid or receive Supplemental Security Income (SSI), reverse mortgage proceeds may affect your benefits.
Although reverse mortgage loan advances are not considered income, they may affect eligibility for some means-tested benefits, which are public assistance benefits that are only available to people who qualify based on their income and assets. Loan advances that are retained in a borrower’s bank account may be counted as assets, also referred to as "liquid resources" or "reserve." You should consult with a qualified financial advisor to learn how a reverse mortgage could impact eligibility of some government benefits.
Are you considering a lump sum cash draw?
Getting a lump sum cash draw from a reverse mortgage, unless it is immediately spent, could impact a borrower’s eligibility for Medicaid and Supplemental Security Income. Funds that you retain could count as an asset and could impact eligibility. You should contact a qualified financial advisor or the local Area Agency on Aging or a Medicaid expert to learn more.
Marc has 36 years in financial services and 6 years in teaching.
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