New Uses for Reverse Mortgage Spur Interest from Financial Advisors

Income distributionPerceptions about reverse mortgages have been swiftly changing since the industry underwent an overhaul last year.  A product once thought of as a desperate lifeline for the poverty stricken elderly is finding an untapped match in retirement and investment portfolios.  The Center for Retirement Research at Boston College estimates that our “retirement income deficit” is $6.6 trillion. That number represents the gap between pension and retirement savings that American households have today and what they should have to maintain their standard of living in retirement. For seniors 62 and older, reverse mortgage is available to fill gaps where retirement funds are unable to, whether due to inadequate planning early on or economic woes that struck a once prepared individual.



Because homeowners who are utilizing a reverse mortgage don’t need to make monthly mortgage payments as they would with a traditional mortgage, such a tool allows retirees to live out the retirement they had planned, even if other investments had faltered.  Some are even using it as a financial bridge to delay social security payments until they are worth more.  Others are using it as a means to protect investment portfolios in down markets and ensure seniors don’t outlive their retirement.  The options are extensive and exciting as financial planners and advisers are learning more and working with lenders to determine the best match for their client’s needs. Reverse mortgages are no longer only a lifeline or a tool of salvation – but now part of the road to retirement liberation.