As a Financial Advisor do you want to increase your clients’ quality of life in retirement?

Financial Advisors have been using Home Equity Conversion Mortgages (also known as Reverse Mortgages) in various ways of strategizing a client’s portfolio. This product is no longer a “needs based” or “product of last resort”, yet a possible powerful component in a long-term retirement plan. Why not give your client ALL their options?

The FHA insured HECM Loan, is being recognized by Advisors like you, as a product, when used correctly, not only morally but ethically, may increase your clients qualify of life in retirement.

Wade Pfau and Jamie Hopkins discuss Reverse Mortgages

Eliminating a Mortgage – A reverse mortgage may be used to eliminate a client’s present mortgage payment, which would greatly improve their monthly cash flow, and eliminate their need to draw from investment assets with you!

Cash management- If your client is 62 or older and has no mortgage or a very small mortgage, they can have a line of credit available to them WHEN THEY NEED IT. The borrower only accrues interest on what they borrow, and what they don’t grows for them over time.

Portfolio PreservationTom Davison, Ph.D., CFP, researcher and member of the Funding Longevity Task Force of the American College says, “One intuitive method is coordinating draws from investment portfolios and reverse mortgages, particularly in the first seven to 10 years of living on a portfolio, avoiding drawing from it in down years can be a big boost to sustaining the portfolio through the rest of your life.”

Long-term care funding- Sally Long, CFP, principal and wealth manager with Modera Wealth Management, said that an HECM could be a way to fund long-term care expenses for clients who may not qualify for long-term care coverage. “What I find compelling about the HECM for this need is the growth in the line availability along with the feature that doesn’t require payments of advances but the ability to do so exists,” she said. In addition, a HECM may also eliminate some complex steps with long-term care insurance

Delaying Social Security- You may consider a portfolio strategy of using funds from a reverse mortgage to supplement income, and thereby delay filing for Social Security benefits. This approach has come under criticism recently from the Consumer Financial Protection Bureau.

This chart provided by Dr. Barry Sacks, PhD with the Funding Longevity Task Force illustrates a client who incorporated a HECM strategy in to their portfolio plan vs. not doing the HECM.

HECM for Purchase loan– Some of your clients may be ready to move from their large family home. The HECM for Purchase is a strategy that allows the client to purchase a new or existing home, primary residence, that adequately fits their active adult lifestyle, while still achieving the goal of no mortgage payment. Click here to learn more.