And speaking of reverse mortgages - which I think are a very, very bad idea - there was another article in the news the other day about a woman whose husband died, and without telling her, took out a reverse mortgage in his name only and as a result, is facing foreclosure. Men can be so nice to their spouses, no? This is called financial abuse and it goes on a lot more than you think. My Grandfather, for example, died at age 55 and left his wife with nothing.
So what does this mean? Well the best decision to make is to not place yourself in a situation where you have to make such dire decisions. Sadly, a lot of people will be in these bad places, in large numbers, and very soon. And many will do very odd things, too, like cashing in a 401(k) so they can "own a house" or whatever. It happens all the time - it is already happening.
On the news the other day, a sad story of a retired Navy war vet. For some odd reason, he decided that taking his pension in monthly payments wasn't good enough, and a helpful company in the Navy Times offered to give him a "lump sum" payout, in exchange for his pension payments for the next ten years. What he needed the money for is unknown (conveniently - was it gambling, stocks, housing, drugs, what?).
Anyway, he now needs money to live on, and he won't see a pension payment until 2025 if he lives that long. And yea, the "lump sum" payout people basically loaned him money at 30-40% interest or more,
Just don't do shit like that. Don't buy a jet ski when you haven't funded your IRA. Don't take out yet another home equity loan to pay off credit cards, while at the same time having 500 channels of cable and a smart phone.
But alas, most folks think cable television is like oxygen ("everyone has it, right?") and not having the latest smart phone would be like living in a 3rd world country.