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Leading Retirement Researcher Pens New Book on Reverse Mortgages

A new book on reverse mortgages hit the shelves this past weekend, offering readers a comprehensive guide on the valuable role home equity plays in retirement income planning.

“Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement” (Retirement Researcher Media, 2016) by Wade Pfau, Ph.D., CFA, principal and director of retirement research at McLean Asset Management in McLean, Va., is the latest manuscript detailing the efficacy of reverse mortgages as a retirement income strategy.

The book, released September 18, provides a framework for retirement income planning, including a discussion on the different challenges and philosophies for creating a financial plan that works best for an individual’s particular circumstances. This helps set the stage for an in-depth analysis of reverse mortgages.

“Reverse mortgages are still a niche topic in retirement income planning, but I think it’s going to grow and more attention will be paid to it,” Pfau told RMD. “In the financial planning community there is still an opportunity to be an early mover into this area as more consumers and financial planners take a closer look at this topic.”

Pfau, who also serves as a professor of retirement income in the Ph.D. program for Financial Planning and Retirement Planning at The American College of Financial Services in Bryn Mawr, Pa., has extensively researched and written articles about the various, strategic uses of reverse mortgages within the context of financial planning.

Like much of Pfau’s writing, which frequently appears in Forbes and The Wall Street Journal, the target audience for “Reverse Mortgages” is a combination of both financial advisors and “sophisticated” consumers—those who have a basic financial literacy and read a lot about financial- and investment-planning related topics.

“Reverse Mortgages” provides a historical background of reverse mortgage in the U.S. before moving into more complex subject matter on how these products work, including a section on their potential uses and how these loans fit into portfolio coordination for retirement spending.

The book also features new research from Pfau on the reverse mortgage tenure payment as an annuity alternative, and also compares some of the most critical research that has been published on reverse mortgages in retirement income planning over the years.

“There hasn’t been a lot of quantification about which strategy works best in which circumstances,” Pfau said. “This is the first book that compares the Sacks’ strategy against the Texas Tech Strategy, as well as against other strategies.”

Pfau’s book is the most recent published work that explores reverse mortgages and their financial planning capabilities. Other notable works include “What’s the Deal with Reverse Mortgages?” written by industry veteran and Chair of the Funding Longevity Task Force Shelley Giordano; and “Understanding Reverse 2016” from Dan Hultquist, a Certified Reverse Mortgage Professional and now director of learning and development at ReverseVision.

Whereas Giordano and Hultquist have written their works as direct participants in the reverse mortgage industry, Pfau’s “Reverse Mortgages” comes from the periphery with a financial planning perspective.

“This is one of the few books out there not written by someone in the [reverse mortgage] industry,” Pfau said. “It’s coming from a different perspective—a broader perspective of how reverse mortgage work, but here’s how you can think of them as part of a retirement income plan.”

The book, “Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement,” is currently available for purchase on Amazon.

Written by Jason Oliva