Has your Nest Egg Cracked?

Wouldn't it be nice if just one day went by without hearing or reading about a bailout or stock scandal?

Other than the National Election, financial horror stories have dominated the news for the past 5 months, the latest being the PONZI-like Pyramid Scheme created by Bernard Madoff, a former chairman of the NASDAQ Stock Market. It's unbelievable that someone in his position would trade on his reputation and expertise to cheat so many people and charities out of more than $50 billion dollars! It really saddened me to see one of the investors interviewed on TV who lost their entire life savings. As one man put it -- "I've lived responsibly my entire life and one phone call wiped it all out!"

I really liked the above photo because while the egg is cracked (symbolic of our own nest egg), the buildings inside look safe - right? And that's how I think most of us feel right now --- while we have watched our own 'retirement nest egg' crack and plunge to 20 t0 30% of it's value, the big corporations have received relief (safety) from the Government. If this financial fiasco hasn't hit you personally, I'm sure you have a friend or relative who has had to postpone retirement because they can no longer count on supplementing Social Security by making withdrawals from their 401Ks.

So, what can you do personally in 2009 to get some relief from this financial crunch? Use your house -- that's right!

First, if you still have a mortgage seriously consider refinancing your mortgage. Today the Fed's policy panel dropped its target for the federal-funds rate to between zero and 0.25%, the lowest on record, so there will be significant drop in interest rates. Get on the internet tomorrow and check out the new, lower mortgage rates!

The second way you can use your home if it's paid off is a reverse mortgage. A reverse mortgage is a special type of home loan that lets your convert a portion of your equity into cash. But unlike a traditional home equity loan or second mortgage, no repayment is required until the borrower no longer uses the home as their principal residence.

To be eligible for reverse mortgage requires that the borrower is a homeowner, at least 62 or older; own your home outright, or have a low mortgage balance that can be paid off at the closing with proceeds from the reverse loan; and must live in the home. There are many other rules, so if you're considering a reverse mortgage, go to: http://www.hud.gov/offices/hsg/sfh/hecm/rmtopten.cfm