
24 | December 2019 | Real Hero Report
When should you start Social Security benefits? There is no
“one-size-fits-all” solution. It depends on many variables
in your personal and family situation. The Social Security
Administration has a wealth of information, including setting up an
online account to see your personalized estimate.
Determine Your Eligibility
For years, full retirement age for full Social Security benefits was defined
as age 65. However, as Americans continued to live longer, Congress
changed the rules to slow the depletion of the Social Security Trust Fund.
The changes gradually increased the age to 67 for people born after
1959.
You don’t have to wait until your full retirement age to start receiving
Social Security. You can start as early as age 62, or as late as age 70.
However, the earlier you start receiving it, the lower your monthly benefit
will be. Though benefits are reduced by only a fraction of a percent for
every month before your full retirement age, it adds up, and can reduce
your monthly benefit by as much as 26 percent. One question to ask
yourself is: are you more comfortable getting less money every month
for a longer period of time or more money every month for a shorter
period of time?
Make an Educated Guess at Life Expectancy
No one wants to think about his or her mortality, but retirement planning
requires that you ask yourself some tough questions. We can’t know
with certainty how long we will live. We can only rely on historical family
data, health history and lifestyle choices to make our best guess.
According to the Social Security Administration, a 65-year-old can
expect to live to his or her mid 80s. One of four people who are alive
today at age 65 will live past age 90, and one of ten will live past age
95. Happily, your golden years may last longer than you think, but the
reality is you’ll need to pay for them.
Dream Big, or Not So Big
For many years, the conventional wisdom was that people needed only
about 70 percent of their pre-retirement income in retirement. However,
a recent research study in The Wall Street Journal suggests that is not
enough for most people today. Obviously, a life of travel and dining out
will cost more than going to the office every day, so it’s important to be
realistic and plan accordingly if your retirement lifestyle will be more
glamorous than your current one. If you want to keep working full time
or part time, your benefits may be temporarily reduced if you earn more
than the stated earnings limit, which is $17,640 for 2019. This reduction
only applies until you reach full retirement age.
Make a Plan
It’s important to remember that your estimated Social Security benefits
are just that—an estimate. Social Security is one important component
to financing your retirement, but it is not the entire picture. To get a
feel for how much you’ll need to fund your retirement, take a look at
our online retirement calculators, and then contact a knowledgeable
financial advisor to put a plan in place that will work for you.
I am excited to announce that Fannie Mae, Freddie Mac and Ginny
Mae (HUD-FHA) have all announced that they will allow higher loan
amounts for 2020. The VA has expressed that they will be changing
their loan limits as well but have not come out with any concrete
guidance as to what that will be. Stay tuned next month as I am sure
we will have more information about the VA loan as we roll into 2020.
The announcement of increasing loan amounts is very exciting
for multiple reasons. It allows home buyers the ability to finance
more home without jumping into a jumbo loan program, which is a
completely different animal when it comes to qualifications. Jumbo
loan programs do come with higher risk to the investor, so generally
rates are not as aggressive and you are required to put more down,
have more assets in reserves and require lower debt ratios with higher
credit scores. The conforming conventional loan program and FHA
loan programs have and always will continue to be the backbone of
the purchase market with low down payment options and the ability to
work with less than perfect credit and higher debt ratios.
The conforming or conventional loan limits for FNMA and FHLMC new
single-family homes has jumped from $484,350 to $510,400, that
is a $26,050 increase to the loan size. Now this may not seem like a
big difference but going from the 400Ks to the 500Ks is a huge price
point difference in the real estate world, so it will make a huge impact
on buyers’ abilities to purchase larger homes with more aggressive
financing. For more information pertaining to detailed explanations on
this federal announcement please visit https://www.fhfa.gov/Media/
PublicAffairs/Pages/FHFA-Announces-Maximum-Conforming-Loan-
Limits-for-2020.aspx. These changes have gone into immediate effect
and can be utilized today!
The HUD-FHA has just announced that loan limits for GNMA new singlefamily
homes are increasing as well. These changes are a piggy back
off the conforming loan limit increases. HUD loan limits vary from state
to state and county to county, but overall it appears that the loan limit
for single-family loans for most of Metro Atlanta has increased from
$379,500 to $401,350, which is a $21,850 jump. If you want to check
out a specific state and or county, please visit https://entp.hud.gov/
idapp/html/hicostlook.cfm. It will take you directly to the HUD portal to
look up each loan limit by state and county. These changes will not go
into effect until January 1, 2020.
This is all positive news for the housing market. The increase in loan
limits shows that our housing market is finally starting to crawl out
from underneath the rock it has been under since the crash of 2008.
Hopefully this will excite the younger generations to look at home
ownership as the American Dream it has always been in this country
and not the nightmare that plagued our economy back more than 11
years ago. If you would like more information about these topics or
anything else, please contact me directly at (404) 213-9663 or email
me at gcerretani@homebridge.com. Have a safe and happy holiday
season and a happy new year!
When Should You Take Social
Security?
Increasing Loan Limits