These days I consider people in their 70s relatively young. I’m friendly with some very active 80+-year-olds, several of whom I’ve referenced in these posts before.

It pays to exercise and enrich that brain!

Thank you both for your comments. Unless I misunderstand the purpose and use of a reverse mortgage, the loan money may be spent however the senior sees fit. If someone can use the funds for a European vacation, for example, why should going back to school be considered a negative?

I can’t think of a better investment than one’s education, at either end of the life spectrum. Whether a senior is interested in training for a new career, ensuring they remain current in their present work, or seeking to start a community project that could serve hundreds or even thousands of people, I would think using one’s reverse for this purpose is a lot better than raiding the kids’ education fund — or attempting to get a college loan in your 60s or 70s.

Anthony Logan NMLS# 345541

Bill

Is Mr. Freedman advocating the use of leveraging to fund his IPA idea? It would seem unlikely. Yet you are.

The concept Mr. Freedman is advocating is taking non-critical cash and placing it into a proposed tax-advantaged vehicle he calls an IPA. The goal is for those entering into the gap years to fund their goals and objective with. Forgetting the politics of the issue for a moment and why this is a wise use of limited resources, that is much different than borrowing to achieve the same objective.

Using borrowed funds to do the same thing has a much different cost and risk structure. Even if the senior gets more cash back from an economic venture than they took out of a HECM, for example, that is only an initial test. The next test is to measure the after-tax result. The final and most critical test is if the overall economic increase to personal wealth exceeds the economic liability (the total balance due on the portion of the HECM used for this purpose) all on an after-tax basis.

I believe in big ideas but only if the participants end up in a better situation than they started in at reasonable risk. Many times big ideas end up in big losses. Just look at Solyndra debacle.

When seniors have cash they can risk invest, Mr. Freedman has an interesting point but not one I support. On the other hand borrowing to do the same thing increases the risk, sometimes exponentially; that I oppose.

I think IPAs are a ridiculous idea unless our Treasury is overflowing with riches and the rest of the world is content. Why should our government fund the whims of any segment of society? “Policy opportunity” is nothing more than political speak for pork belly spending with election day benefits.

Your proposal is very different. How people spend their money is their business.

I am fundamentally against government discretionary spending in economic times like this. Creating “tax advantaged” anything is at its roots government spending.

I think you may have misinterpreted what the author is describing. Since these new “Third Age” adults are going to be reinventing themselves anyway, Freedman proposes looking ahead and planning for such a time by creating an IPA now. As you know, reverse mortgage loans can be used for whatever purpose the loan holder chooses — and investing in one’s own growth for the benefit of both themselves and others seems smart to me. Who knows, someone might end up creating a venture than generates more money than they receive from the reverse mortgage!

It’s really a question of thinking far outside the box in these evolving times.