More years of funded retirement.
One 30-year example rose from about 52% portfolio survival to 82% spending sustainability when standby credit also funded spending after portfolio depletion.
Salter · Pfeiffer · EvenskyStrategy > RateIntelligence compounds.
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Strategy > Rate·Intelligence compounds.
†Borrowers must occupy the home and pay taxes, insurance, maintenance and other property charges. *The 2%–3% example is an illustrative interest-cost effect; the actual note rate does not change and results vary.
A wants-based way to use home equity
Sophisticated retirement planning starts with every asset.
A HECM is an FHA-insured reverse mortgage. Its line-of-credit option lets eligible homeowners draw funds, pay the balance down, or keep credit available for later—while continuing to own and live in the home.
Short first step. Personal follow-up. No pressure to become a spreadsheet.
For the affluent, the micro-affluent, and homeowners looking for more choices—or meaningful monthly relief.
Your guideTravis Brizendine, C.M.A.Forward & Reverse Mortgage Advisor · NMLS #1056864
Start where you’re comfortable
You don’t have to begin with a mortgage conversation.
Explore · Five places to begin
Preview of 5 of 10+ Retirement Strategies
01Replace the required mortgage paymentExplore monthly payment relief—and a potential mortgage-interest deduction.*
For eligible homeowners, a HECM may replace a traditional mortgage and eliminate the required monthly principal-and-interest payment—creating more room in the monthly budget.
In the right mortgage-replacement scenario, interest paid may also create a meaningful mortgage-interest deduction.* You still own the home and remain responsible for property taxes, homeowners insurance, maintenance, and the loan terms.
See if I may qualify02Avoid selling investments on a bad dayGain more choice over which accounts you draw from—and when.
Retirement planning is partly about how much you have—and partly about which account you draw from, and when.
Home equity can be part of that conversation, potentially helping you avoid selling invested assets at an inconvenient moment. It is a planning option, not an automatic answer.
See if this fits me03Build a reserve before you need itA standby line of credit may offer flexibility for future care, repairs, or market changes.
Some homeowners value having a resource available—even if they don't need it on day one.
We can talk through a standby line of credit and whether it could be a future option for home care, repairs, or a market downturn.
Ask about my options04Create room for Roth planningUse non-income loan proceeds for cash-flow flexibility while your tax professional models a Roth conversion.
Reverse-mortgage payments are loan proceeds, not income. That does not make a 401(k) or IRA withdrawal—or a Roth conversion—tax-free.
For some households, loan proceeds may provide cash-flow flexibility while a tax professional evaluates a Roth conversion and its tax cost. The result depends on the full plan and your individual circumstances.
Explore the tax-aware conversation05Buy the next home with more flexibilityExplore HECM for Purchase, retirement-account flexibility, and potential deductible interest.*
A HECM for Purchase may allow an eligible homeowner age 62 or older to buy a new principal residence using HECM proceeds.
Some buyers explore whether this approach preserves retirement-account flexibility and, in eligible situations, creates meaningful deductible mortgage interest when paid.*
Eligibility, available proceeds, and closing costs are part of the conversation.
Ask about a purchase strategyUnlearn · Straight answers
Let's Separate Myth From Reality. It's Not 1995.
There is no need to be scared of a tool you have not fully explored. There is also no reason to rush into one. Here are five honest starting points.
Do I still own my home?
Yes. With a HECM, title remains in your name. It is still a loan secured by your home, so you must meet the loan obligations.
Do I have to make a monthly mortgage payment?
With a HECM, there is no required monthly principal-and-interest payment. You must still pay property taxes, homeowners insurance, and applicable property charges, keep the home in good repair, and live there as your principal residence.
If HECM proceeds aren't taxable, is it “free money”?
No. A HECM is a loan, not income—so loan proceeds generally aren't taxable. Interest and fees are added to the balance over time. The loan typically becomes due when the last borrower sells, moves out, dies, or does not meet loan obligations. “Not taxable” and “free” are not the same thing.
What happens to my family or heirs?
When the loan becomes due, heirs can usually sell the home, repay the loan, and keep any remaining equity—or repay the balance to keep the home. For a HECM, heirs generally do not have to pay more than 95% of the home's appraised value when the balance is higher than the value.
Is this only for someone in a last-resort situation?
No. Some homeowners explore a HECM for planning, flexibility, or a right-sizing move; others need payment relief. Neither makes it automatically right. HUD-approved counseling and a clear review of alternatives are part of making an informed choice.
The research behind the strategy
Dead asset?
Hear it from the PhDs.
Less sales talk. More research.
Could coordinating home equity with the rest of retirement create more value than it costs? Researchers have put that question to the test.
Published simulation findings · Study-specific assumptions · Not predictions for your plan
A larger legacy in more trials.
Active home-equity strategies left greater residual net worth in 67–75% of trials versus last-resort use, at initial withdrawal rates of 4.5–7%.
Sacks & Sacks, PhDsTiming changed the outcome.
Early credit-line establishment improved 30-year survival by up to 31 percentage points in the study’s scenarios. It also reduced median remaining wealth.
Pfeiffer · Schaal · SalterThe source of spending matters.
Pfau’s example needed a $53,333 tax-deferred withdrawal to net $40,000 at an assumed 25% tax rate—or a $40,000 HECM draw.
Wade Pfau, PhD50,000simulated market paths
What did Pfau find?
Establishing credit early could improve retirement sustainability. Spending home equity quickly could also increase downside risk. How—and when—you use it matters.
Read the study and its assumptionsGive every asset a job.
A buffer for the portfolio. Home equity may provide spending flexibility when selling investments is unattractive.
Measure the whole plan. Weigh income, taxes, liquidity, remaining equity, and loan costs together.
Buy the portfolio time. Available credit is borrowing capacity—not investment earnings.
Bring the uncorrelated asset to the table.
A source of spending that doesn’t require selling stocks. Housing values still carry risk; “uncorrelated” does not mean risk-free.
Sources, assumptions & the fine print
- Standby Reverse Mortgages: A Risk Management Tool for Retirement DistributionsSalter · Pfeiffer · Evensky, 2012 · Journal of Financial Planning
- Reversing the Conventional Wisdom: Using Home Equity to Supplement Retirement IncomeBarry H. Sacks, PhD · Stephen R. Sacks, PhD, 2012 · Journal of Financial Planning
- HECM Reverse Mortgages: Now or Last Resort?Pfeiffer · Schaal · Salter, 2014 · Journal of Financial Planning
- Incorporating Home Equity into a Retirement Income StrategyWade D. Pfau, PhD, CFA, 2016 · Journal of Financial Planning
The 2012 standby example assumed age 62, a $500,000 portfolio, a $250,000 home, and 5% initial spending. Standby use alone produced 78% portfolio survival; 82% included borrowing after the portfolio ran out. The 2014 timing findings depended on the then-low-rate environment and long home occupancy. These are historical models using the loan rules, costs, and market assumptions of their time; today’s terms differ. Results are not guarantees or a recommendation for every homeowner.
A reverse mortgage has interest, fees, and eligibility requirements. Borrowers must meet occupancy, property-tax, insurance, and maintenance obligations. Borrowing can reduce remaining home equity. Tax examples are illustrative; coordinate decisions with your financial and tax advisers. Research authors do not endorse Travis or a particular lender.
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Check my fit · Your first step
Three numbers can tell us whether it's worth a conversation.
Some people come here for more choice. Others come because the monthly payment is making retirement tighter than it should be. Both deserve a clear conversation. Start with your home value, loan situation, and youngest borrower's age. Add more only if you'd like a sharper first read.
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