NOTE: this is a slight revision to the post published in March 2014.
Delaying Social Security can significantly boost lifetime retirement income but creates a shortfall while waiting. A case study used a HECM reverse mortgage line of credit to partially replace early Social Security benefits. The study’s Monte Carlo retirement success rate was only 5% if Social Security started at 62 and did not use housing wealth. The success rate jumped to 90% by delaying Social Security to age 70 and using a reverse mortgage. The study was designed to show a positive impact of using a reverse mortgage, and did! Besides adding to the retiree’s available resources, another key is the reverse mortgage draws are tax-free for a retiree in a high tax bracket. The SS Delay Case Study describes the study in detail and discusses factors affecting the reverse mortgage’s impact. A SS Delay Case Study Powerpoint deck is also available.