Is a Reverse Mortgage the right tool for a safe and secure retirement?

The perfect retirement strategy would be to have the cost of daily living stay as fixed as our incomes. Unfortunately, that just doesn’t happen. Those costs usually result in a higher withdrawal rate from your investment accounts. Drawing from a reverse mortgage has the potential to mitigate this risk by reducing the need for portfolio withdrawals at inopportune times.

Is a Reverse Mortgage the right tool for a safe and secure retirement


Using a Reverse Mortgage to meet these higher costs can preserve greater overall legacy wealth for a given spending goal, or can otherwise sustain a higher spending amount for longer in retirement. In other words, used efficiently a Reverse Mortgage can provide not only income but help you preserve the legacy for your family.

Related: Why should you consider a Reverse Mortgage

According to Wade Pfau, PHD, CFA “The holy grail for retirement income strategies is improved efficiency: being able to spend more while preserving a larger legacy. The synergies created by strategic use of an HECM line of credit can support a higher spending level in retirement and/or support a greater legacy value for remaining assets.”

For many seniors the conventional wisdom on how to treat housing wealth in retirement was to preserve it as a last resort option. If it did not need to be used, the home may be left as part of the legacy for your family.

Related: You have questions, we have Reverse Mortgage answers

More and more seniors, financial planners and CPAs are realizing the benefit to obtaining an HECM reverse mortgage early in retirement and then strategically spending from the available credit can help improve the sustainability of retirement income strategies.

In its simplest terms if we think of our legacy value to be passed to our family as the combined value of any remaining financial assets plus the remaining home equity once the reverse mortgage loan balance has been repaid.

Rather than worry about the percentage value of each asset, research reveals the possibility of sustaining a spending goal while also leaving a larger legacy at death. Strategically using home equity can lead to a more efficient strategy than the less flexible option of viewing the home as the legacy asset that must not be touched until everything else is gone.

How and when to use a Reverse Mortgage is an important decision not only for you but for your family as well. Come in and meet with one of our Reverse Lending Experts and see if it’s the right strategy for all of you.

Some of this information first appeared on The Retirement Researcher and

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For more information from Reverse Lending Experts, contact us at (657)-888-3863.

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