Faculty Publications


HECM Reverse Mortgages: Now or Last Resort?

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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.