Reverse Mortgage Retirement Strategies Help Seniors Spend ‘Wisely’

Home equity is a major asset for many seniors and, if used strategically within a retirement portfolio, can significantly improve a senior’s financial situation in their non-working years, suggests one financial planner in an article this week. 

In the right circumstances, retirees’ lifetime spending “can be raised 60 percent to even 100 percent by using reverse mortgages strategically with planned portfolio withdrawals,” said Tom Davison, a certified financial planner (CFP) with Columbus, Ohio-based Summit Financial Strategies in a recent LifeHealthPro article.

The article, which was written by Ed McCarthy, also a CFP, explores various methods that can help senior clients spend wisely during retirement. One of those strategies involves tapping home equity via a reverse mortgage. 

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Whether the client opts to receive monthly proceeds or the line of credit option, his or her individual circumstances will ultimately decide which choice works best for them, says Davison, who notes that receiving monthly income offers convenience for some.

“It doesn’t take any adjustments along the way, and I think that’s easy for people to live with and easy for advisors to set up,” Davison says in the article. “The line of credit is more flexible and can require a few more decisions along the way.” 

Davison is also a member of the Funding Longevity Task Force, a group chaired by Shelley Giordano that includes several distinguished members of the financial planning community, including John Salter and Barry Sacks, both of whom have written extensively about the use of reverse mortgages in retirement planning.

Read the LifeHealthPro article.

Written by Jason Oliva

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  • In the article Ed does not quote Tom at any point (whether by reasonable inference or within quotation marks) in which Tom calls reverse mortgage proceeds, income; yet Jason writes the following: “Whether the client opts to receive monthly proceeds or the line of credit option, his or her individual circumstances will ultimately decide which choice works best for them, says Davison, who notes that receiving monthly income offers convenience for some.”

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