Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement

by Wade Pfau

Reverse mortgages have been surrounded by negativity. They were often mentioned alongside phrases like "last resort," "out of money," and "bad choice." In 2014, intrigued by the seemingly universal bad rap reverse mortgages had cultivated, Dr. Wade Pfau began researching them in depth. Over the course of the next year, he came to the conclusion that reverse mortgages aren't inherently a bad idea, though they are often misunderstood and not used in a most beneficial way. In fact, Dr. Pfau realized that reverse mortgages---when used correctly---can provide an added layer of security for retirees and allow them to enjoy retirement more by gaining liquidity from an illiquid asset.

Genres: Finance, Nonfiction

178 pages, Kindle Edition

Published September 18, 2016

About the author

WADE D. PFAU
PhD, CFA®

Professor of Retirement Income

RICP® Program Director

Co-Director of the New York Life Center for Retirement Income

Areas of Expertise:
Annuities, Financial Planning, Investments, Life Insurance Planning, Life Insurance Practices, Portfolio Management, Retirement Planning

BA, University of Iowa
BS, University of Iowa
MA, Princeton University
PhD, Princeton University

Reviews

[Sukesh Shekar · Rating 5 out of 5]

the most insightful source on using housing wealth as part of your retirement

35 million households are 62 or older. Less than 1% use this gem called a HECM. It can increase retirement length, lifestyle, liquidity, and legacy by introducing a new asset class into your portfolio.

My favorite tips were using it to reduce (income) taxes, delay social security and reduce cash reserves with a coordinated portfolio strategy.

I you won’t accept a portfolio that 100% stocks, why do you accept a portfolio that 0% home equity?

[Diana · Rating 5 out of 5]

An objective professional look at reverse mortgages under current law. Bust several myths about why have been denounced in the past. Practical guidance backed up by Dr. Pfau’s research and others.highly recommend reading this book before or early in retirement or as part of understanding retirement income sources. Well-researched and written.

[Linda Leitz · Rating 4 out of 5]

Pfau is an expert on retirement funding. He debunks the opinion of reverse mortgages as a consumer ripoff and gives solid research on how they are structured, as well as effective use of reverse mortgages in retirement funding. The academic research details do not make for light reading. But the conclusions are important for financial professionals who want to give objective advice.

[Terry Earley · Rating 2 out of 5]

Short, informative read. Plenty of deep detail, written mainly for financial professionals.

[Dave · Rating 4 out of 5]

Good intro to how reverse mortgages work, beyond the mostly negative hype from an author that appears to have no vested interest in promoting or villifying them.

[Laura Power · Rating 4 out of 5]

Wade Pfau provided an in-depth and alternative look at reverse mortgages that explains how the use of them may work in some financial income plans. I especially liked the first chapters on financial income planning and will probably incorporate it in our own plan. I would recommend this book to someone looking to either provide a legacy or provide extra income that is trapped in your home.

[M31 · Rating 3 out of 5]

Aunque este orientado al mercado USA, gran introducción a cómo utilizar de manera responsable esta herramienta financiera y, al igual que en How much can I..., Muy bien documentado matemáticamente y ampliamente explicados los mecanismos burocráticos y sus riesgos asociados.

[Linden · Rating 4 out of 5]

Excellent overview of the role of home equity in a retirement plan.

[Allison · Rating 4 out of 5]

If you are considering a reverse mortgage or have the misfortune of retiring right before a down market, this book is definitely worth your time.

[Jason Branning · Rating 5 out of 5]

Excellent summary of reverse
mortgages and practical uses for them. Dr. Pfau's assertions are thoroughly researched and offer helpful context for retirees thinking about a reverse mortgage.