New reverse mortgage research demonstrates that home equity or investment portfolios may be equally effective when funding sustainable spending. The study by Peter Neuwirth, Barry Sacks, and Stephen Sacks in the October 2017 Journal of Financial Planning provides insights using home and portfolio sizes from $100,000 to $800,000.

From the paper’s executive summary:

• This paper examines the effect of using reverse mortgage credit lines to supplement retirement income by two types of retirees that have not been addressed in the previous literature: (1) those whose retirement savings are significantly below those of the mass affluent; and (2) those who are “house rich/cash poor.”
• Results of this analysis demonstrate an important contrast with the results of the earlier literature; specifically, the greater percentages of home value, when coordinated with the retirement savings portfolio, resulted in substantially greater percentages of the portfolio that can be drawn.
• This paper suggests a new alternative to the 4 percent rule that can guide planners and retirees toward an optimal cash withdrawal strategy. This new rule takes into account the total of the retiree’s retirement savings plus his or her home value.