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Reverse Mortgage Can Be a Solid Buffer against “Stock Shock”

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If you’re a fan of roller coaster rides, then you’ve probably enjoyed the wild ups and downs on Wall Street during most of this year. There have been quite a few precipitous drops followed by some tepid recoveries in the stock market since early 2016. For most of us who prefer a measure of stability in our portfolio, the Big Dips of 2016 have been anything but pleasant – and even though things look solid right now, with an election not far off there could be more so-called excitement to come. To call the stock market “turbulent” would be an understatement.

When we counsel our clients, we always emphasize the importance of protecting one’s assets in retirement. But how can you do that during times of extreme market volatility? An article earlier this year on the website Reverse Mortgage Daily suggested a surprising answer: a reverse mortgage actually can provide the ideal cushion against big drops in a retiree’s stock portfolio. It’s a surprising way to utilize this remarkably versatile financial planning tool.

Click here to read this timely and helpful article. It provides a fresh new take on the Home Equity Conversion Mortgage, or HECM, better known as the reverse mortgage, giving one more reason why it may be time for you to explore your reverse mortgage options.

As the article explains, stock market uneasiness is causing many to see reverse mortgages in a new light. Retirees who need predictable sources of income can be especially vulnerable to market volatility. The Reverse Mortgage Daily analysis puts it this way: “With the market unpredictability stoking concerns for the future, some retirees may be finally convinced to take another look at how home equity can fit into their retirement plan.”

When the market takes a big drop (as it did shortly after New Year’s Day, 2016) it places a particular burden on retirees who rely on regular withdrawals from their stock-based retirement accounts. That’s where a reverse mortgage can be a vitally important financial lifeline. The article quotes Jamie Hopkins, professor of taxation at the American College in Pennsylvania, who states, “Reverse mortgages really provide an income source that is not correlated to market returns.” Hopkins went on to say, “For retirees, to have another source of income that is not related to the market, that is a great benefit.”

The article explains how this concept works. With a reverse mortgage in place, retirees can literally ride out a big dip in the market, giving their portfolio a chance to recover as the market begins to correct. You can stop (or reduce) withdrawals from stock-based funds and draw on your home equity instead, so that your investment nest egg is protected thanks to the cushion provided by the line of credit from your HECM. This can be a huge boon to a retiree’s financial security in turbulent times, and it often makes a difference between security and panic when the markets become shaky and unsettled.

Here at AgingOptions, we always advise our clients and radio listeners that adequate preparation is the key to a secure retirement plan. But the Reverse Mortgage Daily article sounds an ominous note: according to a recent survey of 1,000 adults from American Funds, only about three in ten respondents age 50 and older are bracing for big bumps in the market over the next decade. A reverse mortgage could be just the answer, adding immeasurably to your financial security in an unknown future.

But is a reverse mortgage really right for you? Could a reverse mortgage provide an advantageous source of retirement income free from stock market hiccups? There’s no one-size-fits-all correct answer. The best way to find out for sure is to sit down with a reverse mortgage expert and go over your particular situation. We will be happy to refer you to a trusted expert in the field who can advise you.

For answers to all your retirement questions, we invite you to contact our office for a consultation any time. We take a comprehensive approach to retirement planning, which we call LifePlanning, helping our clients prepare not only financially but in every other aspect of retirement as well. Are your legal affairs in order? Have you explored your housing choices and provided for your medical care requirements? Is your family fully aware and supportive of your wishes? If you’ll set aside a few hours to come to one of our free LifePlanning Seminars, you’ll discover just as thousands have that LifePlanning offers a truly unique strategy to help you enjoy the secure and fruitful retirement future you’ve dreamed of.

For details and registration, click on the Upcoming Events tab on this website, or call us during working hours. It will be our pleasure to meet you and to help you plan for a rewarding retirement.

(Originally reported at

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