There are actually several reasons you might consider refinancing your reverse mortgage, with perhaps the most important being that your husband is now over age 62. As a co-borrower, should you either need to move out of the home into a care facility (or die before he does), your husband would be able to access the line of credit on the reverse mortgage. (While non-borrowing spouses are guaranteed the right to remain in the home, they have no access to the line of credit.)

The fact that both of you are now older is itself a factor in favor of a refinance, increasing the available funds available for withdrawal (either as a monthly payment or as a line of credit.

In the same manner as your neighbors, who are motivated to refinance their homes by the two factors of interest rates having fallen and home prices having increased, you can consider those factors in deciding to refinance your reverse mortgage.

Three years have passed. You’re older. The value of your home has probably increased significantly. Interest rates are lower. All these points indicate in favor of refinancing.

With all that, the most powerful reason for a reverse refinance might be the step up in spousal benefits.

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In the course of analyzing your separate and jointly owned portfolio assets, you realize you have become almost “top heavy” in your equity investing with very little in fixed income, although you do keep cash reserves for emergencies and for moderate investing in the art collection. You’re somewhat concerned about inevitable downturns in the stock market, but with interest rates so low, are not ready to make major portfolio shifts to bonds. In terms of your overall financial picture, debt relative to equity is almost insignificant, with no home mortgage or credit card debt.

You’ve obviously devoted serious thought to the future and to re-assessing your portfolio allocation decisions. Going forward, you might consider “re-balancing” your overall asset allocation using your housing wealth. The term “overlay” comes to mind, because portfolio managers of pension funds, faced with the same concerns about the bond and stock markets, use overlays of derivatives and options to offset their exposure to different segments of the market.

https://www.institutionalinvestor.com/article/b14z9mwbj8vgjj/the-growing-demand-for-overlay-strategies-in-pension-fund-management

Three years have passed. You’re older. The value of your home has probably increased significantly. Interest rates are lower. All these points indicate in favor of refinancing.

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You have considered refinancing the home in which you hope to spend your remaining years. The purpose would be to make a one-time meaningful gift in the form of a donor advised fund. You like the idea of making a decisive move today (and taking an immediate tax deduction) without needing to make all the decisions now about which specific charities will benefit. The home values in your neighborhood have increased dramatically, and you’d have the chance to access meaningful dollars and still fit the payments into your budget. Still, you’re hesitant to take on an increased monthly obligation.

It’s possible that accessing housing wealth in a different manner might provide the perfect solution. With a reverse mortgage, you would be accessing dollars to fund your donor-advised fund without taking on an obligation to make payments every month or quarter. As you’ve stated, the growth in your home value could allow you to access meaningful funding for your donor-advised fund. Of course, you would continue to pay the property taxes, insurance, and maintenance costs on the home, but any remaining mortgage obligation you have could be paid off, possibly still leaving funds that could be used in emergencies.

As an alternative approach, you might discuss with your tax advisor setting up the reverse mortgage so as to generate retirement income, using some of your investment assets to fund the charitable initiative.

Some careful thought and planning will be needed, but using housing wealth to fund impact investing can help build your own financial plan while you set about doing your small part to help build a better world!

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While inflation has just begun to make itself felt in your budget, your withdrawal levels are likely to be more than adequate to sustain your lifestyle. Your home is fully paid for. In fact, during your first year of retirement, you were able to make some substantial improvements to the property and plan to spend the rest of your life there.

Normally, you consider yourself a long-term thinker, not prone to fear reactions when it comes to investments. However, certain recent world events, including the resurgence in COVID cases, have gotten you thinking about possible market pullbacks. Rather than continuing those monthly withdrawals, you like the idea of dollar cost averaging, allowing the distributions to be used to “buy low” on any dips, without any compulsion on your part to “time the market”.

In short, you are in the process of rethinking the income generation system that has served you well for the first stage of your retirement. While you had originally planned to defer taking Social Security benefits, one consideration is to turn on that income now. There is also the possibility of replacing the investment draws by taking on an additional load of consulting gigs.

Consider using your housing wealth as an alternative source of monthly or quarterly income through a reverse mortgage. You can set up the mortgage as a line of credit, taking fixed payments in precisely the amount you were drawing from your retirement and investment portfolios. However, far fewer dollars might be needed, since the draws from a reverse mortgage are tax free.

In the process of “rethinking” the income generation system that has served you well for the first stage of your retirement, think of using your own housing wealth.