The report was published by the Center For Economic and Policy Research in June 2008. The contents of 'The Housing Crash and The Retirement Prospects of Late Baby Boomers' are as dire as the title implies!



Well, based on the old adage 'if you get lemons - make lemonade', here is one of the aspects that it drew attention to.

For a temporary home move, renting is a good option for young, short term employees who will be off to another state in say, two years. These people may have family and may be looking to rent a modest home with a back yard. They are the type of family that normally would have bought a home for two years but are now more wary of the housing crunch.

Baby boomers who have spent their whole lives buying and securing their family home are in an ideal situation to make an investment in the property market that will appeal to this type of rental client.

A small rentable home can be bought by baby boomers without taking on a high interest payment. This is because boomers who are over 62 and who have paid off a large amount of the housing debt in their family home can apply for what is called a reverse mortgage.

A reverse mortgage is a way of lending yourself some money out of your own home; you still keep the home and live in it. With house prices currently falling at 1.5% per month, now is a good time to apply for a reverse mortgage (before it drops further). You pay no monthly payments; in fact it is like a secured line of credit, with your home as collateral against any received monies.

Enlist the help of a reliable real estate agent and start looking around the small properties that are in foreclosure and you will see that the prices are low. You can borrow enough and buy a small bargain home for cash (use a real estate agent who is experienced with foreclosures and REOs).

The rental on the property will be paying off the interest on your reverse mortgage/line of credit and you will still have some pocket money left over for that trip in your RV driving down to the sunny South!

When your time in this world is over (!) you will be leaving your heirs one house that is paid off (the second rental property), plus your original family home which may still have a small reverse mortgage to pay off (or not). The original house will be sold and the bank will pay off their line of credit on it and your heirs will get the balance of your original family home as well.

Meanwhile you have lived a more luxurious and worry- free retirement due to extra income.