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take out all the money in a lump sum, or you can set up a line-of-credit account from which you withdraw money as you need it. (Or you can opt for a mix of all those options.) In 2010 the upper limit for an FHA-insured reverse was $625,500.
    There is no risk you will lose your house if you do a reverse. You can stay in the home as long as you like, but when you move or die, the bank that owns the reverse gets repaid. Typically that involves selling the home. If the home sells for more than the value of the reverse, your heirs receive the excess. But if the sale price does not cover the value of the reverse, your heirs will not be on the hook. The bank can never collect more than the home’s value at the time of the sale.
    You must be at least 62 years old to take out areverse mortgage. If you are married you both must be at least 62, or you can opt to remove the younger spouse from the title.
    I do not recommend a reverse if you intend to move in a few years anyway, because the fees on these loans can be very expensive. You will pay an origination fee of 2% on the first $200,000 and then 1% on the balance above $200,000, up to a maximum of $6,000 for the total origination fee. Most reverse mortgages are insured by the FHA—the FHA refers to these loans as Home Equity Conversion Mortgages (HECM)—and that means there is an insurance premium attached; it amounts to an additional up-front 2% and an annual premium of 0.5%. You’ll also be hit with closing costs on the loan, including an appraisal. All told, fees can easily be 8% to 10% of your loan amount. If you plan on staying in your home for many years, those fees can be worth it. What’s not wise is taking out a reverse when you anticipate moving in a few years.
    The AARP website ( www.aarp.org/revmort ) has a special section that walks you through the basics and has valuable information on how to recognize any offers that are too good to be true. Sadly, there is no shortage of con artists out there looking to take advantage of the elderly. There is also great information available from the Department of Housing and Urban Development, which oversees the FHA reverse program. Go to www.hud.gov and type HECM into the search box. You can use a free online calculator to estimate how much you may receive through an FHA-insured reverse mortgage.
    SITUATION: You have an IRA at a brokerage firm, but you’re worried that if the company goes under, you will lose all your money.
    ACTION: Stop worrying. The money you have invested in your accounts at a brokerage or fund company is completely separate from the operations of the parent company. The brokerage or fund company can’t use your money to pay its bills and debt.
    Even if a company goes under, what happens is that you will transfer your money to another brokerage or fund company. Or, more likely, the company will be taken over and you become a client of that new company.
    And just so you know, if there is an irregularity and a company uses your money fraudulently, you may be able to recover up to $500,000 ($100,000 limit for cash accounts) from the Securities Investor Protection Corp. This is not like federal insurance. It’s a voluntary program of member firms that keeps a kitty around to settle problems; at the end of 2008, SIPC had about $1.7 billion in its fund. This covers standard investment accounts only; SIPC does not cover alternatives such as currency and commodityinvestments. Check with your brokerage or fund company to see if it belongs to SIPC.
    SITUATION: You have a variable annuity and are worried that the insurance company will go under and you will lose all your money.
    ACTION: Money invested in a variable annuity is typically in segregated subaccounts that are separate from your insurer’s balance sheet. Even if the insurer runs into trouble, your money should not be affected. Now, that said, you do need to understand that your variable annuity is susceptible to market losses; that’s what the word