“Should you use a reverse mortgage in retirement?,” by Peter Rueth, MarketWatch

A major component of wealth and retirement planning often overlooked or ignored, is home equity. Based on U.S. Census Bureau figures, collected in 2011 and dated 2013 the average married couple entering retirement will have a net worth of $194,226. However, when home equity is removed net worth drops to just $43,921. With 77% of a retiree’s net worth locked in home equity it’s astonishing why so many financial planners ignore home equity when creating retirement plans. There is currently over $6.3 trillion in senior housing wealth and its growing daily as 10,000 people turn 62 every day. . . . Despite a bad reputation, this FHA government-insured product has a lot more advantages than disadvantages and fiscally responsible retirees should consider incorporating it into their overall retirement plan. Equally important, financial advisers must discuss with clients and take into consideration what role home equity plays in their overall retirement plan.”

LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):

With all three legs of the retirement planning stool at risk—savings, pensions, and Social Security—home equity is the shaky unicycle that remains.

Should you use a reverse mortgage in retirement?

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