The first question I ask those who come for advice on how to manage living expenses after retirement is about their current assets. In Savannah, it is common for a single home to make up the majority of one's wealth. Many retirees own a home that they have lived in for a long time and have paid off the mortgage, yet they often find themselves short on cash each month.

Looking at the Savannah housing market, the average home value according to Zillow is $335,719, which is a 0.5 percent decrease from a year ago. As of the end of March, the median sale price was around $331,333, and by August, the median sale price had risen to $359,900. This indicates that Savannah is among the higher-priced markets in Georgia, and long-term residents likely have a significant equity stake in their homes.

One way to access this equity for living expenses is through a reverse mortgage. This structure allows homeowners aged 62 and older to borrow against their home, receiving funds from a lender instead of making monthly payments like a traditional mortgage. The Home Equity Conversion Mortgage (HECM), a popular option, is backed by the Federal Housing Administration and offers choices between a lump sum, monthly payments, or a line of credit. The loan is repaid when the home is sold, the owner passes away, or the owner no longer lives in the home.

While this can be advantageous for retirees facing cash flow issues, it is important to note that it does not eliminate tax obligations. In Chatham County, the median effective property tax rate for Savannah is 1.04 percent, and the general maintenance millage rate for 2025 is 10.518 mills. Property in Georgia is assessed based on 40 percent of its fair market value. Even if a reverse mortgage generates monthly cash flow, the property taxes and insurance premiums must still be paid by the homeowner, and a financial assessment must confirm the ability to cover these costs before the loan can be executed.

There are both advantages and disadvantages to the initial costs. The origination fees and initial mortgage insurance premiums can be higher than those of a traditional mortgage, and over time, the equity left in the home decreases, reducing the assets that can be passed on to heirs. However, HECMs are non-recourse loans, meaning that if the home value falls below the loan balance, heirs are not required to pay the difference thanks to the FHA guarantee. It is crucial to remember that failing to continue paying property taxes or insurance can lead to foreclosure risks.

In cities like Savannah, which have many historic districts, the types of housing and the criteria for insurance premiums may differ from other areas, potentially leading to variations in the reverse mortgage loan limits based on appraisal results. Areas adjacent to wetlands often have additional flood insurance costs, so it is essential to factor in both property taxes and insurance premiums to determine what is truly affordable. Addressing these details is part of the mandatory counseling provided by HUD-approved counseling agencies before applying. Counselors can also suggest alternative solutions to address living expense shortages tailored to the family's situation, so it is advisable to discuss the counseling results with family afterward. In areas like Savannah, where the population of Korean retirees is growing, it is wise to schedule appointments in advance as they can fill up quickly.

As of 2024, the population aged 65 and older in Georgia is projected to be 15.8 percent of the total, and in areas like Savannah where many settle after retirement, consultations about managing living expenses continue to be in demand. Since tax, rental laws, and mortgage conditions can vary slightly by county, it is advisable to verify these details according to the specific area within Savannah. Reverse mortgages require mandatory counseling from HUD-approved agencies before applying, and since there are actual cases of scams targeting the elderly, it is important not to rush the decision and to discuss it thoroughly with family. This article is not investment or legal advice, and consulting with a professional before entering into any contracts is recommended.