CBS News: Utilizing a Reverse Mortgage in Retirement

Many financial roadblocks exist when it comes to saving for retirement in the U.S., however, there are certain actions workers can take to address these obstacles, according to a recent article from CBS News.

Using home equity for retirement consumption could be one possible solution for retirees who are “home rich and cash poor,” the CBS News article explains, but the reality is Americans are underutilizing this resource.

Exploring ways to leverage home equity to help with mortgage payments in retirement, more specifically, looking into a reverse mortgage may be an option for someone who has a sufficient amount of equity in their home.


The importance of leveraging home equity in retirement was highlighted in a report issued earlier this month by the Bipartisan Policy Center (BPC). The comprehensive, 152-page report outlined several recommendations that the U.S. government, as well as employers and financial institutions, could adopt to address the most prevalent issues currently facing American workers.

“The BPC report noted that half of all Americans age 62 and older are “home rich, cash poor”, meaning at least half of their net worth is in their home equity,” the article writes.

In addition to home equity being underutilized in retirement, the lack of basic knowledge on how to manage personal finances and the fact that social security is at a crossroads are two other challenges that American are facing.

Read the full CBS News article here

Written by Alana Stramowski

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  • This article shows us how much positive publicity we are getting and it is becoming quite frequently, for a change!

    I have downloaded the entire report and I have started reading it, the report is interesting.

    I know 152 pages are a lot of pages to print out but you can download the report into a PDF by clicking on “Report” in this article!

    The PDF would be great to e-mail professionals. This could be especially interesting for financial planners/advisors to receive from us when we are trying to establish a relationship with them? They are the type professional that would take the time to read it!

    John A. Smaldone

    • John,

      If there was a type to read it, it would these folks; however, most would delete it without reading it. It is just too long. If it was an article like the Standby Reverse Mortgage Strategy in the Journal of Financial Planning back in 2012, many might read it but even then a majority would simply file it in the round file.

  • The trouble is do the authors of the study or of the referenced CBS news story include the capitalized value of Social Security into their asset in reaching the conclusion that home equity is over 50% of the value of the assets most retirees hold?

    NEWS FLASH — not every senior receives the identical amount in Social Security benefits, not all are the same age, and not all have the same life expectancy resulting in much different values for this benefit. So without having that piece of information, it seems many seniors desperately cling to the value of their homes as the only asset they have. Too many times we hear seniors with large Social Security benefits claiming they fear running out of cash. While they might run out of sufficient cash flow to enjoy the retirement they envisioned in their fifties, Social Security has always managed to make its scheduled monthly benefit payouts.

    Too many articles today hammer home the same theme. It is like the little boy who cried wolf. Many seniors are by now tone deaf to these cries of use your home equity without any reasonable explanation as to how they can do that except by selling their home; so they do NOTHING.

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