Faculty Publications

Title

HECM Reverse Mortgages: Now or Last Resort?

Document Type

Article

Publication Date

2014

Abstract

This study outlines recent changes in the reverse mortgage market and investigates plan survival rates for distribution strategies that establish a Home Equity Conversion Mortgage (HECM) reverse mortgage line of credit at the beginning of retirement and as a last resort. Calculations were based on Monte Carlo simulations using a 4 percent to 6 percent real withdrawal rate, in 1 percent increments, for a client who has a $500,000 nest egg and $250,000 in home equity at the beginning of retirement.