Reverse mortgages provide access to cash, funded by a home’s equity. Cash is wonderfully flexible, creating a wide range of opportunities for enhanced retirements. Wise use of the cash is the challenge, knowing that the home’s equity will be spent. Different homeowners will best use reverse mortgages in different ways. Benefits can include increased retirement spending, increased estate size, comfort of a having contingency fund for needs late in life and ability to buy a new home. Some benefits tend to use the reverse mortgage’s line of credit early, while others delay use of the line of credit to take advantage of its growth.
Dr. Wade Pfau, a retirement researcher, offers a way to think of uses: