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Fitting Home Equity into a Retirement Income Strategy | Presented by Wade Pfau, Ph.D., CFA

Wed, May 18, 2022 11:00 AM – 12:00 PM PDT

How can reverse mortgages be used to better secure retirement?

In the early days, reverse mortgages were generally treated as a last resort option after other resources were depleted, or as a way to obtain quick access to a large lump-sum of assets. This is not the appropriate way to think about reverse mortgages in a retirement income plan, especially in light of recent research.

The reverse mortgage option should be viewed as a method for responsible retirees to create liquidity for an otherwise illiquid asset, which in turn can create new options that potentially support a more efficient retirement income strategy (more spending and/or a greater legacy). Financial advisors must pay attention to their client’s home equity, as this is a vital asset that can be used as part of a coordinated strategy to improve retirement outcomes.

In “Fitting Home Equity into a Retirement Income Strategy” by Wade Pfau, you will learn:

1. An overview of retirement income planning, which sets the context for understanding the potential role of reverse mortgages

2. The basics for how reverse mortgages work

3. Potential uses for a reverse mortgage

4. Ways to coordinate the line of credit use with distributions from the investment portfolio

5. How to think about the reverse mortgage line of credit as a form of insurance to protect against market losses or declines in the home value.

Wade D. Pfau, Ph.D., CFA, RICP®, is the program director of the Retirement Income Certified Professional® designation and a Professor of Retirement Income at The American College of Financial Services in King of Prussia, PA, as well as a co-director of the college’s Center for Retirement Income. As well, he is a Principal and Director for McLean Asset Management and RISA, LLC. He holds a doctorate in economics from Princeton University and has published more than sixty peer-reviewed research articles in a wide variety of academic and practitioner journals.