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  • NewRetirement User

    71 year old from Rochester, NY

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  • A lump sum distribution from a reverse mortgage that stays in your bank account could make you in-eligible for Medicaid in Florida - since it would count towards the asset test. You may be able to get a reverse mortgage to get rid of your mortgage payment and not take a lump sum or you may be able to immediately use the money for some other purpose, so that it doesn't affect your assets - however you should talk with your Medicaid office and a Florida licensed reverse mortgage specialist before deciding what to do.

    Any lump sum from a Reverse Mortgage in Florida should not affect Social Security or Medicare, since they are not asset based.

  • Login to rate this answer:   Answered on 11/18/2007
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  • It wont affect it as long as you take any available proceeds in a line of credit, or monthly income, that you will be spent in that month. Do not keep excess funds in your checking account. Only draw out what you need , when you need it.

    Good luck!

    Tamera Field
    Reverse Mortgage Specialist
    Financial Freedom

  • Login to rate this answer:   Answered on 4/8/2008
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  • Not just Florida, but in every State, you can't exceed the maximum amount you're allowed to have in your bank account, so you've got to control the flow, and that happens with the Credit Line or monthly payment options. However, if the amount you'll receive from the Reverse Mortgage is just enough to pay off your existing Forward Mortgage, you can take the cash out as a lump sum, and if you're doing that, the fixed interest rate program probably makes more sense.

    Another very very important point to consider is the 5 year lookback period. If you received a lump sum distribution from a Reverse Mortgage, it'll impact your eligibility and/or benefits from Medicare (or MediCal in California), if you're within the 5 year period (it used to be 3 years, but now it's 5). So you need to think about that too, when you're deciding how you'll receive your cash.

  • Login to rate this answer:   Answered on 8/10/2012
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.