Reverse Mortgages - “I think I’ve been around long enough to know what’s what”
Best known for his mustache (or maybe Magnum PI), Tom Selleck for a period of time was the face of reverse mortgages, in-between Matlock courtroom scenes.
The commercial would start on a serene walkway, lined by spanish moss, calming music playing in the background, the kind you hear at an assisted living center, and there’s Tom Selleck. He’s now a wise, older man who cares about you and wants to have a gentle conversation about the benefits of reverse mortgages. Now, the term reverse mortgage levitates the hairs on most folks arms, but when I watched an episode of “Fun with Annuities” on YouTube, the hairs on mine slightly fell.
The “Fun with Annuities” podcast, hosted by Stan the Annuity Man, featured Wade Pfau, a renowned expert in retirement income planning. Pfau, a professor at The American College of Financial Services, has built a reputation for his research on sustainable retirement strategies. Together with Stan, they discuss essential retirement concepts like annuities, long term care, reverse mortgages, and managing risk, making this episode valuable for anyone nearing retirement.
At minute twenty-nine, the conversation shifted to reverse mortgages, which Pfau views as a misunderstood but potentially powerful retirement tool. Homeowners can open a reverse mortgage line of credit at age 62, which grows over time. The line of credit can offer a safety net for retirees, allowing them to draw from home equity in down markets, protecting their investment portfolios from unnecessary losses.
Below are some of the benefits:
Access to home equity
No required monthly payment
Line of credit growth
Non-recourse loan
There are requirements for a reverse mortgage and it may not be for everyone, but if you plan on staying in your home for several years after 62, this may be a tool to think about adding to your tool box. *This is not financial advice, but it’s an interesting new perspective on reverse mortgages.
Pfau and Stan emphasize a holistic approach to retirement based on your risk profile.
Below is the “Fun with Annuities” episode. Enjoy!
Wade Pfau: Retirement Income Style Awareness (Holiday regift) - https://www.youtube.com/watch?v=2Itr6HHeWRI
