Robert Merton said “Reverse mortgages are a powerful – yet largely untapped – tool for retirees to improve their standard of living.” “This is going to become one of the key means of funding retirement in the future.” “Reverse mortgage” is a poor name in his estimation, with their powerful role in supporting retirees’ standard of living in retirement better captured by the Korean description as “home pensions.”

Merton is a professor of economics at M.I.T. and was awarded the Nobel Prize in economics in 1977 for his contributions to the Black-Scholes option-pricing model.

These quotes are from Robert Huebscher’s post “Robert Merton on the Promise of Reverse Mortgages and the Peril of Target-Date Funds” from www.advisorperspectives.com on November 2, 2015. Huebscher has graciously granted permission to repost it here. Robert Merton on the Promise of Reverse Mortgages.

Bob Huebscher’s site also has insightful comments continuing the discussion and adding significant value. Commentary on Robert Merton discussion.

You are invited to comment here as well.