Related: Increasing Retirement Income Through the Power of Tax Deferral

Now 68, Martha was unwittingly thrown into full retirement when she was laid off from her job last year. Without a paycheck, her monthly income has been reduced significantly to $2,850. She’s receiving $1,750 from Social Security, $100 from her pension, and $1,000 after-tax net from an IRA withdrawal, but with a mortgage payment of $750, plus Homeowners Association (HOA) fees of $250 a month and a $175 car payment, her expendable income is very limited, to say the least.

When I first mentioned the idea of refinancing to Martha, she was surprised. “I didn’t think I could qualify now that I’m retired. Is it really possible?” I assured her that as long we could verify her income, refinancing was very possible—even if that income is coming from retirement savings rather than a salary. Working together, we came up with a great plan that puts today’s interest rates to work for Martha’s cash-strapped situation. Here’s how we did it.

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