A reverse mortgage —particularly a Home Equity Conversion Mortgage (HECM)—can be a powerful tool for financial planners who want to help clients extend the life of their retirement investments. When used thoughtfully, it allows retirees to maintain flexibility, weather market downturns, and plan more strategically for the future. Here’s how it works in practice:

🔑 How a Reverse Mortgage Helps Prolong a Retirement Portfolio

Reduces Portfolio Withdrawals in Down Markets

During market declines, retirees often face the tough decision of selling investments at a loss. Instead of locking in those losses, they can access tax-free funds from a reverse mortgage in Greenville SC. As a result, the portfolio gains more time to recover, helping protect long-term financial health.

Delays Social Security Benefits

Another major advantage is the ability to delay claiming Social Security. By using the mortgage proceeds in the early years of retirement, clients can postpone their benefits, leading to higher monthly payouts in the future—up to 8% more for every year of delay, up to age 70.

Covers Unexpected Expenses Without Tapping Investments

Unplanned expenses like healthcare needs or home repairs can wreak havoc on retirement savings. Instead of pulling money from an investment account, clients can use the mortgage funds to cover these costs. This move preserves the integrity of their portfolio while easing financial pressure.

Creates a Standby Line of Credit

A HECM line of credit offers ongoing flexibility. Over time, the available credit actually grows, regardless of home value. This feature ensures that clients have a liquid, tax-free buffer asset available—ideal for navigating bear markets or supporting cash flow in early retirement.

Manages Sequence of Returns Risk

Finally, reverse mortgages in Greenville SC help planners address the often-overlooked sequence of returns risk. Using home equity strategically, especially in the early years of retirement, can prevent the steep declines that occur when investments are withdrawn during down years.

✅ When Reverse Mortgage Makes Sense

These mortgages are a smart fit for clients who are at least 62 years old, have significant home equity, expect a long retirement, and want to reduce pressure on their investment portfolios. When those boxes are checked, this financial tool can support greater security and flexibility. Be sure to consult Reverse Mortgage Specialist for more information.

⚠ Reverse Mortgage Considerations for Financial Planners

While the mortgage funds aren’t counted as taxable income, planners must remind clients that borrowers are still responsible for property taxes, insurance, and basic upkeep. Additionally, the home must be the borrower’s primary residence. Coordinating a reverse mortgage with Roth conversions, Social Security timing, and Medicare premiums can unlock even more advantages.

Curious about this type of mortgage could benefit your clients’ retirement strategy? Call Reverse Mortgage Specialist now to explore your options and start building a more flexible financial future.