Mellody's Money on the Move: You're Retired, Now What?

April 26, 2010— -- Nearly everyone dreams about all the things they're going to do when they retire. But not too many people dream about what they're going to do with their money during that time.

Luckily "Good Morning America" financial contributor Mellody Hobson has thought about just that and is here to answer some of the most common retirement finance questions.

Recently she traveled to an active living community in Phoenix to take questions from retirees there.

Check out her advice below and tune in to "Good Morning America" at 7 a.m. ET for the latest in the Mellody on the Move series.

When it comes to getting a new car when you're retired, Hobson said the best thing to do is to pay as much in cash as you can and make the biggest down payment possible.

"Don't pay any more interest than you have to," Hobson said. "Just put a bigger down payment so that your monthly payments are less, then any interest that you're paying is less."

Also, right now interest rates are low for cars, which could make your payment even lower.

Leasing a car is a fine alternative, Hobson said, but there are issues if you drive a lot. If you do drive over your mileage limit at the end of the year, you will have to pay for the extra mileage.

If you own a home and it is mostly paid for, you could be a candidate for a reverse mortgage, Hobson said.

"The way reverse mortgages work is the bank will pay you a certain amount of money, usually monthly, then, when the last spouse passes away the bank recoups the cost," Hobson said.

For those that qualify, a reverse mortgage can be a good deal, but only if done with caution, Hobson said.

"The one thing that I would say is be very, very careful when you think about getting a reverse mortgage and who you use. Some organizations charge exorbitant fees, so you really want to shop around and go with a reputable provider," she said.