One of the biggest challenges facing retirees is how to bridge the gap between ever-rising expenses and virtually stagnant Social Security checks and other sources of income. While we are all finding ways to be more frugal, many folks still fall short every month.

In a recent issue of Miller's Money Forever, our team took an in-depth look at reverse mortgages, something many retirees turn to for extra income. I can safely say that for the vast majority of our readers they are a poor investment, but not necessarily a bad idea.

In a nutshell, in exchange for a reverse mortgage on your home the bank sends you a monthly check until your 100th birthday. There are some up-front fees, and with each monthly check your mortgage increases. You must, however, continue to live in your home as your primary residence. If you move out and sell, any remaining equity after the sale is yours to keep. At the same time, if the mortgage is higher than your home's selling price, you don't have to make up the difference.

It sure sounds nice, and yet the only way to turn a reverse mortgage into a great investment is to live a good, long life and stay in your home. The odds are stacked against you, as you must outlive your actuarial lifespan by a good five years or so to make it a good investment. And what if your health takes a turn for the worse, and you need to move into an assisted-living facility? Those checks will stop coming.

With a reverse mortgage, you're bargaining with your home, which for most folks is a large part of their personal wealth. You will never learn if your investment turned out to be good or bad until you die or move out.

Fortunately, Housing and Urban Development (HUD) housing counseling is mandated for 95% of reverse mortgages. The counseling is quite worthwhile, and I recommend it to any retiree who's struggling to meet monthly expenses.

Our team worked with the HUD agency in Orlando while researching our reverse mortgage report, and they were a tremendous help. I never knew how many state and federal programs were available to help keep seniors in their homes. The good news is that you cannot be turned away if you cannot pay the normal $125 fee.

Any senior who is struggling to keep his or her finances together should take the time to meet with a HUD counselor. Even if a reverse mortgage is not right for you, they have many other options that may better suit your needs.

In speaking with the HUD counselor and through our own research we found that many seniors are turning to reverse mortgages because their bills are stacking up while their income is drying up. A reverse mortgage may be a good solution for you under very particular circumstances, but if you're finding your income isn't keeping up with expenses then it's time to seriously consider changing your income strategy. Most seniors do this several times during retirement. We've recently released a presentation on our income strategy: it uses a special class of investments to create a monthly income stream. The best part is, you can start as soon as today and with as little or as much as you want to put into it. Here's the link to the presentation with all of the details.

Dennis Miller is the author of “Retirement Reboot”, a book chronicling his own journey to save his retirement in a low yield, turbulent investing environment and providing readers with actionable ideas for getting their retirement finances back on track. He works with some of the country’s top investment managers, authors and analysts to tackle the financial challenges faced by today’s retirees. Working with analysts at Casey Research, Dennis created "Miller’s Money Forever," a newsletter that provides retirees, and those soon to be retired, with actionable recommendations on how to prepare and maintain a profitable retirement portfolio. Prior to retiring in 2008 Dennis ran a successful consulting business and authored several books on sales management. He was also a regular contributor to the American Management Association and an active international lecturer for 40 years. Find more of Dennis’ columns and latest special research reports at millersmoney.com or contact him at dennis@millersmoney.

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