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Retriees Ignoring Home Equity May Pay Dearly in a Down Market
Unless your television has been turned off for the last week you have seen the stock market’s plunge due to China’s currency crisis and crude oil prices. With more advisors embracing the strategic use of a HECM to prolong investment portfolios and more retirees taking a do it yourself approach to retirement reverse mortgages are positioned more than ever before to provide a timely solution.
Last September an article in the Wall Street Journal articulated how HECMs can be used to buffer against market swings and sequence risk. For those relying heavily on stocks and equities as a source of income the sequence of their withdrawals can have long-lasting effects, especially when one sells investments during a market downturn. Pfau and other notable financial professionals have championed the benefits the HECM’s line of credit in a standby reverse mortgage strategy, drawing from the credit line when portfolios have lost value rather than selling stocks for a loss in a down market.
Beyond the role advisors play in shaping retirement strategies more retirees are taking a hands on do-it-yourself strategy to…
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