Workers autonomous continue to receive a worse pension than salaried workers who have quoted in the general scheme. Although this reality will be corrected little by little in the future, as the listing conditions of one and the other become more equal.
In 2022, pensioners who came from self-employed activities received an average of 835 for the retirement pension, while the pensioners that quoted previously in the General Regime they obtained an average of 40% more, 1,254 euros.
Self-employed: what to do with your retirement
In general, the low contributions that self-employed workers have paid for decades – chosen by themselves, but also motivated by the absence of comparable benefits– lead to very poor retirement pensions.
For this reason, in many cases, self-employed workers seek other complementary sources of financing to spend their retirement with an income higher than that granted by Social Security.
In this situation, a very attractive option is to take advantage of the advantages of reverse mortgagea financial product that allows you to collect a life annuity… in exchange for mortgaging your home.
Do you want to know what the reverse mortgage consists of and all its characteristics? we tell you All the details so that you value if it is really worth it.
What is a reverse mortgage and how does it work?
Is the reverse mortgage really a viable alternative to complement the retirement pension of a self-employed person? We could say yes, as long as the autonomous in question have a property owned at the time of retirement.
What is it and how exactly does a reverse mortgage work? The reverse mortgage is a financial product offered by credit institutions and insurers.
The main characteristic of the reverse mortgage is that it generates a life annuity in your nameas a beneficiary and as long as you are retired, in exchange for you mortgaging your house or a property in your name.
Specifically, the financial institution grants a loan to the owner of the property already retiredwho will collect it in a single payment or, as is more usual, will receive a monthly income for life until the moment of death.
During all this time, the retired person, signatory of the reverse mortgage, will receive a monthly rent and you will be able to continue using your home or the mortgaged property without any type of limit or restriction.
Reverse mortgage, income tax and inheritance
This monthly income is also tax exempt in it Personal Income Tax (IRPF).
However, at the time of death they are the heirs those who must face the loan repayment to the entity, with interests usually higher than those applied in a traditional mortgage.
In the event that the heirs do not want to repay the loan, the lending credit institution remains with the property ownershipobject of the reverse mortgage contract.
The loan will have a maximum amount similar to 80% of the appraisal price of the home, so that at the time of death the heirs can choose what to do with the property and with the loan.
Keep the property (and therefore repay the entire loan to the bank, with interest) or give up the inheritance.
In the unlikely event that the life income reach your maximum cap (the maximum amount of the loan) will stop collecting monthly rent, but the retiree will not lose his house, whose ownership will change hands only when he dies.
In these cases, you can hire a life annuity insurancewhich would allow keep charging the monthly rent even once the amount of the initially agreed loan has been exhausted.
Requirements to contract a reverse mortgage
The reverse mortgage is an interesting option for autonomous they want finance your retirementbut is the reverse mortgage ideal for the retirement of the self-employed?
The answer to this question lies exclusively in the personal and financial characteristics of the freelancer in question. The freelancer must study all the options that he has on the table and choose depending on your needs and your circumstances.
In the event that you are a retired self-employed person or about to do so, we summarize the main requirements For an entity to offer you this product:
- He applicant and beneficiary must be over 65 years of age that is, a dependent with a degree of disability greater than 33%.
- The applicant must owning a property that can be mortgagedin this case, that may be the object of the reverse mortgage contract.
- The Collateral must be executable at the time of the reverse mortgage holder’s death. In other words, at that time the ownership of the home can pass directly into the hands of the credit institution if the loan consumed by the heirs is not paid.
- The home must have been appraised and insured against any damage.
In these cases, if the self-employed person meets the requirements, they can hire a reverse mortgage with a credit institution.
The reverse mortgage in Spain
In countries with low retirement pensions, it is a widely used option, although in the case of Spain this product is still starting up.
In the case of the self-employed who, like the rest of Spaniards, tend to save fundamentally in real estate assetsthe reverse mortgage can become the perfect complement to the public retirement pension.
The retiree may live in peace and with an acceptable standard of livingand even high, the last years of his life, without having to worry about his expenses.
In addition, it has the advantage that los heirs do not have to give up the home in the event that they can pay the loan enjoyed by their relative.
Other advantages to consider is the reverse mortgage facility to designate as its beneficiary not only the owner of the property but also also to your legal partnerin the event that you are also over 65 years of age.
If you are self-employed and are thinking about your retirement, at Yoigo Negocios we want to help you make the best decision. Go into our web or call 900 622 500 and we solve any doubt.