Reverse Mortgages: The Next Pillar of Retirement Income

The Home Equity Conversion Mortgage (HECM), aka reverse mortgage, is beginning to play more of a role in retirement planning.  The reverse mortgage and retirement planning industries have opened the lines of communication with one another in order to understand how the two can work together.  Through the years, the pillars of U.S. retirement income have been known to be comprised of the following:  Social Security, employment-based plans (i.e. pensions), personal financial assets and continuing to work.  Recently, the Department of Labor expanded the fiduciary responsibility of financial advisers under the ERISA act to ensure that financial advisers present all options that are in the best interest of their clients.  Home equity continues to be one of the biggest assets people have, and therefore is one of the options that needs to be considered.  One of the drawbacks of home equity is that it's tied to real estate and lacks in liquidity, which is where a reverse mortgage comes in.  A reverse mortgage allows a homeowner to unlock the equity in their home making it liquid without requiring any payments or increasing cash outlays.  The cash available from a reverse mortgage can be utilized in a variety of different ways depending on the overall needs of the retirement plan.  For example, a reverse mortgage can be used to defer Social Security or used as a savings account by way of a line of credit which grows in value.  Overall, it can help to supplement people's needs and provide them with greater options. There is still much to accomplish in bringing the reverse mortgage and retirement planning communities together, however the awareness continues to grow and more and more conversations are developing.            
    
For more information on reverse mortgages and other related topics contact:

Rick R. Rodriguez
Certified Reverse Mortgage Professional, CRMP
NMLS# 473353
Toll Free (877) 500-0454
Local (702) 460-6222