Your clients spent 30 years saving for retirement. What if retirement lasts 40?

Consider a client who starts saving at 32 on an $86,000 salary, contributing about $855 a month. At a 7% average return, that client reaches $1 million at 62. By most measures, the accumulation job is done.

The harder job is making that $1 million support a retirement that could last 30 or even 40 years. For homeowner clients, one of the most useful tools for that job is often left out of the plan entirely: home equity.

The 4% Rule Was Built for 30 Years

Under the 4% rule, a $1 million portfolio supports a $40,000 first-year withdrawal, raised each year for inflation. At 2% inflation, that withdrawal reaches $48,760 in year 11, $59,438 in year 21 and $86,590 in year 40. Cumulative withdrawals over 40 years total roughly $2.42 million.

The rule was calculated to a 30-year horizon. Lowering the rate improves durability, but every step down is a real cut in client income:

Illustrative only; assumes 2% annual inflation increases. Not a guarantee of income or portfolio survival.

The question isn’t how much a client has saved. It’s how much they can safely spend without running out.

Sequence Risk Compounds Over a Longer Horizon

Two clients can earn the same average return and end up in very different places. The one who hits a bear market early in retirement must sell more shares at depressed prices to fund the same spending, and those shares never participate in the recovery.

The usual responses both carry costs: cut spending in a downturn, or keep drawing down a shrinking portfolio. Over a 40-year horizon, neither is attractive. What helps is a source of funds that isn’t correlated with the market.

Home Equity: The Overlooked Retirement Asset

For many clients, the home is one of their largest assets, yet most income plans treat it as an estate asset or a last resort. For homeowners 62 and older, an FHA-insured Home Equity Conversion Mortgage (HECM) can put that equity to work in three distinct ways.

1. A standby line of credit to manage sequence risk

A HECM line of credit gives the client a non-portfolio source of cash. When markets fall, the client draws from the line instead of selling investments, giving the portfolio time to recover. The unused line also grows over time at the loan’s growth rate, which increases borrowing capacity (not home value or equity).

The benefit isn’t more spending. It’s control over which asset to draw from, and when. For clients holding an overly conservative allocation out of fear of volatility, the line may also justify revisiting that allocation.

2. Tenure payments to lower the withdrawal rate

On an adjustable-rate HECM, eligible clients can elect monthly tenure payments for as long as the loan remains in good standing. A $1,000 monthly payment adds $12,000 a year, cutting the portfolio draw needed for $40,000 of spending to $28,000.

Illustration, not a quote. Actual payments depend on age, home value, interest rates, principal limit and other loan factors.

Tenure payments are borrowed against the home, so the loan balance grows. They should be evaluated as a funding source with a cost, not as free income.

3. Eliminate the required mortgage payment

Many clients enter retirement still carrying a mortgage. A HECM can pay it off, removing the required monthly principal and interest payment.* A $1,500 monthly payment is $18,000 a year, or 1.8 percentage points of withdrawal rate on a $1 million portfolio.

This doesn’t raise income; it lowers the income needed for the same lifestyle. The debt remains and the balance grows as interest and charges accrue, and the client must still pay property taxes, insurance, HOA dues and maintenance.

The Fourth Planning Question

Retirement planning usually centers on three questions: How much should the client save? How should they invest? How much can they safely withdraw?

A fourth deserves equal weight: How can every asset, including the home, be coordinated to make the savings last?

A HECM isn’t right for every client. Costs, interest accrual, reduced equity, property-charge obligations and the impact on heirs all need careful review. But for the right client, each strategy addresses a different problem: the line of credit buffers bad markets, tenure payments lower the withdrawal rate, and a mortgage payoff lowers required spending. They can be used alone or together, subject to available proceeds.

A client retiring at 62 who lives to 102 faces four decades of inflation, market uncertainty and rising healthcare costs. The goal isn’t the largest possible portfolio. It’s a sustainable plan that lets clients enjoy retirement without fearing they’ll outlive their money.

Important HECM Information

A Home Equity Conversion Mortgage is a reverse mortgage insured by the Federal Housing Administration and available to eligible homeowners age 62 or older. Borrowers must meet applicable financial assessment, occupancy, and property requirements. No monthly principal and interest payments* are required while the loan remains in good standing, but interest and applicable fees accrue, increasing the loan balance. Borrowers remain responsible for property taxes, homeowners’ insurance, property maintenance, and other applicable obligations. Failure to meet loan requirements may result in the loan becoming due and payable. A HECM reduces available home equity over time and may affect the amount remaining for heirs.

The examples in this article are hypothetical and do not guarantee investment results, loan proceeds, or retirement portfolio longevity. Consult qualified financial, tax, and legal professionals when evaluating retirement income strategies.

*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.

Donald Battista, NMLS ID 2030959. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Arizona Mortgage Banker License 0926603. Florida Mortgage Lender Servicer License MLD1827. Louisiana Residential Mortgage Lending License 1025894. Oklahoma Mortgage Lender License ML012498. Texas Mortgage Banker Registration 1025894. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. Subject to credit approval. For licensing information, go to: www.nmlsconsumeraccess.org

Equal Housing Lender #4591216148

What if the money you have saved could help you enjoy life today instead of waiting to pass it on?

There is a growing trend called SKI, which stands for “Spending the Kids’ Inheritance.” It has nothing to do with snow or mountains. It is about enjoying the money you have worked hard to earn.

For many Americans, that means traveling more, seeing new places, and making memories with family and friends.

People Are Traveling More and Spending More

According to a recent report from Squaremouth, a travel insurance comparison company, couples over age 65 are spending much more on travel than younger couples.

In fact, the report found that:

• Couples over 65 spend an average of $9,960 per trip, compared with $6,618 for couples under 50.
• Their vacations last an average of 15 days, compared with 11 days for younger couples.
• They plan their trips earlier and are visiting places like Italy, Japan, Greece, and even Antarctica.
• Travel among couples over 65 has increased by 3.8% from the previous year.

These are not just weekend getaways. Many people are taking the trips they have dreamed about for years.

Isn’t That What We Worked For?

For years, we have been told to save, save, save. Build your retirement accounts. Pay off your mortgage. Leave something for the children.

Those are good goals. But somewhere along the way, we may have forgotten something important.

Your money is also there to help you enjoy your life.

I am not suggesting that you spend everything or stop planning for the future. Far from it. Having a sound financial plan is important.

But I do believe there needs to be a balance between saving for tomorrow and enjoying today.

After all, what good is having wealth if you never get to enjoy any of it?

What About the Equity in Your Home?

For many homeowners, their house is one of their largest financial assets. Yet much of that wealth remains locked in the home.

I often meet people who have done everything right. They have worked hard, saved money, and built significant equity in their homes. But they hesitate to spend money on the things they would love to do.

That is where home equity can become part of the conversation.

A Home Equity Conversion Mortgage (HECM) may allow homeowners age 62 and older to access some of that equity without having to sell their home or make required monthly principal and interest payments.* They must still pay property taxes, insurance, and maintain the home.

The funds could be used for travel, family experiences, or simply to provide more financial freedom.

It is not the right solution for everyone. But it is an option worth understanding.

A Different Way to Think About Your Money

I have spent more than 23 years helping people understand how home equity can fit into their financial plans.

One thing I have learned is that financial security is not just about how much money you leave behind. It is also about how you live along the way.

Perhaps the question we should be asking is not simply, “How much can I leave my children?”

Maybe we should also ask, “How can I use what I have built to make the most of the years ahead?”

You worked hard for your home. You built the equity.

Turns out you can spend equity.

And maybe even go SKIing!

Source: Squaremouth, travel insurance sales analysis of travel spending and booking trends among couples over age 65, as reported by Rethinking65.

*Borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees. Mutual of Omaha Mortgage, Inc. dba Mutual of Omaha Reverse Mortgage, NMLS ID 1025894. 3131 Camino Del Rio N 1100, San Diego, CA 92108. Connecticut Mortgage Lender License ML-1025894. Florida Mortgage Lender Servicer License MLD1827. Maine Supervised Lender License 1025894. Massachusetts Mortgage Broker and Lender License MC1025894. Licensed by the New Hampshire Banking Department, Mortgage Banker License 1025894MB. Licensed by the New Jersey Banking and Insurance Department.  New Jersey Residential Mortgage Lender License 1025894. Pennsylvania Mortgage Lender License 72932. Rhode Island Lender License 20163229LL. Rhode Island Loan Broker License 20163230LB. Virginia Mortgage Broker and Lender License, NMLS ID #1025894 (www.nmlsconsumeraccess.org). Subject to credit approval. These materials are not from HUD or FHA and the document was not approved by HUD, FHA or any Government Agency. For licensing information, go to:www.nmlsconsumeraccess.org #4585818628 Equal Housing Lender

Parents are giving billions of dollars to their grown children. But who is looking out for Mom and Dad?

Being a parent doesn’t end when your children turn 18. And for many families, neither does financial support.

According to a recent report from the U.S. Census Bureau, parents gave $26.6 billion to their adult children in 2024. That money came from 2.6 million parents and helped 3.7 million adult children who were living on their own.

And that doesn’t include the money parents spend helping children who still live at home!

Clearly, the Bank of Mom and Dad is still open for business. And judging by the billions being handed out, it may be getting too big to fail! 😊 The only problem is that unlike a real bank, Mom and Dad don’t have a government bailout waiting if the money runs out.

Why Are Parents Giving So Much?

Life is expensive. Buying a home, raising children, paying off student loans, and keeping up with daily bills can be a challenge.

Many parents want to help their children get ahead.

Sometimes it means helping with a down payment on a home. Other times it might be paying off a credit card, helping with rent, or covering an unexpected bill.

The Census Bureau found that among parents who gave money to adult children living away from home, nearly 73% helped one child. The rest helped two or more.

In fact, the typical parent who gave financial help provided $4,725 during the year.

That is a lot of money, especially for someone living on a fixed income.

But Who Is Taking Care of Mom and Dad?

I have spent more than 23 years helping homeowners plan for their financial future.

One thing I often see is parents who are more worried about their children’s financial needs than their own.

I understand that. We all want our children to do well.

But there is an important question we need to ask.

Can you afford to help your children without putting your own future at risk?

What happens if you need long-term care? What if your living costs keep going up? What if your savings don’t last as long as you hoped?

These are real concerns.

The same Census report found that Americans also gave $20.2 billion in financial help to their parents in 2024.

Money is moving between generations in both directions.

Wouldn’t it be better to have a plan that allows parents to help their children today without needing financial help themselves tomorrow?

Your Home May Hold the Answer

For many Americans, their home is one of their largest financial assets.

They have spent years paying down the mortgage. At the same time, the value of their home may have grown a great deal.

Yet much of that wealth remains tied up in the house.

Many homeowners think of their equity as something they will leave to their children.

But what if some of that equity could help the family today?

A Home Equity Conversion Mortgage (HECM), may offer another option.

For eligible homeowners age 62 and older, a HECM allows them to use part of their home equity without selling their home.

There are no required monthly principal and interest payments. Homeowners must still pay property taxes, insurance, and maintain the home.

The money can be used for many things, including helping children buy a home, paying for family needs, or building a financial safety net.

Of course, there are costs, and the loan balance grows over time. That is why it is important to understand the full picture before making a decision.

An Inheritance Today or Tomorrow?

Here is something worth thinking about.

Many parents hope to leave their home or savings to their children someday.

But their children may need help more today than they will 20 years from now.

Think about a young family trying to buy its first home. A little help with the down payment today might make a big difference in their lives.

Or perhaps a child is struggling with debt. Helping them get back on their feet could change their financial future.

Does that mean you should give away your savings?

Absolutely not.

The goal is to find a way to help your family while making sure you have enough to take care of yourself.

That is where good financial planning comes in.

A Different Way to Think About Home Equity

I believe we need to change the way we think about the wealth in our homes.

For years, we have been taught to pay off the mortgage, build equity, and leave the house to our children.

There is nothing wrong with that.

But home equity can do more than provide an inheritance. It can also help improve your life and, in some cases, the lives of your children.

The key is having a plan that looks at your income, savings, home equity, and future needs.

A HECM is not right for everyone. But understanding how it works may open doors you never knew existed.

After all, you worked hard to build the equity in your home.

Turns out you can spend equity, too.

And perhaps use some of it to help the people you love while you are still here to enjoy seeing the difference it makes.

Source: U.S. Census Bureau, September 30, 2026, Parental Financial Support Does Not End When Children Grow Up, Even After They Move Out, by Liza C. Valle. Based on the 2025 Survey of Income and Program Participation, reporting financial assistance during 2024.

Read the original U.S. Census Bureau report