Reverse mortgages, or home equity conversion mortgages, are touted as a way for homeowners to live longer and more affordably in their homes.

And while most seniors do so out of necessity, a reverse mortgage can also be part of an investment strategy or insurance policy that extends retirement savings, provides income tax-free and keeps you in the home, experts say.

It can be a great fit if you don’t want to pass on your home to heirs.

Your Retirement Advisor co-founder, Brian Saranovitz shared this perspective in the article:

Even if you have plenty of savings and have paid off your mortgage, a reverse mortgage could be set up with a reserve account, says Brian Saranovitz, co-founder of Your Retirement Advisor in Massachusetts. That way, you tap it when you need it, it grows slowly over time, and it can be used for many purposes, including an income buffer when the investment portfolio loses value in a downturn, a long-term care fund, an emergency fund, or a last resort fund.

A homeowner is never responsible for more than 95 percent of the home’s market value. A surviving spouse or heirs are not responsible for a negative account balance upon the retiree’s death, Saranovitz says.

Read the full article

Retirement planning academics such as PhD, Wade Pfau believe a reverse mortgage is an important component of many retiree’s plans, “Reverse mortgages have transitioned from a last resort to a retirement income tool that can be incorporated as part of an overall efficient retirement income plan. Two benefits give opening a reverse mortgage earlier in retirement the potential to improve retirement outcomes, even after accounting for loan costs.”

Read more from Pfau on reverse mortgages

Check out Pfau’s book on reverse mortgages

If you’d like to chat with Brian about how your retirement plan can be shored up with a reverse mortgage, request a complimentary consultation.

We’ll also be hosting a reverse mortgage webinar very soon.