While Home Equity Conversion Mortgages (HECMs) – also known as reverse mortgages – were once thought to be for seniors short on cash and retirement savings, the fact of the matter is that reverse mortgages are a powerful financial tool, gaining traction with financial advisors and savvy consumers alike.
Tapping into home equity with a reverse mortgage boasts several benefits – namely paying bills, while preserving other savings and investments. After all, withdrawing from investment accounts during market downturns can wreak havoc on the longevity of a portfolio – especially early in retirement. Rather than locking in losses, retirees who use a “coordinated strategy” could cover expenses by pulling funds from a reverse mortgage when markets drop – all while protecting their savings.
Check out a real use case of leveraging home equity as part of a strategic financial plan in the full article from the New York Times.