B$D :

03: Does A Reverse Mortgate Ever Make Sense with Wade Pfau

March 05, 2018

Today we're going to be talking about whether or not a Reverse Mortgage is a good idea. This is a topic that there's a whole lot of misinformation...

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Today we’re going to be talking about whether or not a Reverse Mortgage is a good idea. This is a topic that there’s a whole lot of misinformation about, so Kate has a fantastic guest on the show, to give you the truth of it. Wade Pfau actually wrote a book about the topic, so listen in as he clarifies this for you today.

Wade, who’s a Ph.D and a CFA, has been interviewed by Kate before, for US News and World Report. Wade is a Professor of Retirement Income in the PhD Program for Financial and Retirement Planning, at the American College of Financial Services, in Bryn Mawr,  Pennsylvania, where they offer a lot of great courses, in the Financial Services arena. Wade also serves as a Principal and Director of Retirement Research for McLean Asset Management and he hosts the Retirement Researcher website, as an educational resource for individuals and Financial Advisers. He also holds a Doctorate in Economics from Princeton and he frequently publishes in a number of Academic and Practitioner Research Journals. Listen in to get the truth about Reverse Mortgaging.

Show Highlights:

  • Wade discusses some of the more common misconceptions around the topic of Reverse Mortgages.
  • There used to be high costs involved in setting up Reverse Mortgages, but if you shop around a bit, you can find lower cost versions, now.
  • Wade talks about the risk of foreclosure, due to people not being able to keep up with the property taxes and the other costs of keeping the home.
  • Using a Reverse Mortgage, as it’s been written about in the Journal Of Financial Planning, as part of a strategic and responsible Retirement Income Plan.
  • Wade gives a short tutorial on how a Reverse Mortgage works.
  • A nice planning trick– If you open a Reverse Mortgage and don’t borrow much from it right away, your line of credit grows instead of the loan balance. This can create a lot of options for you, for later on, in your retirement.
  • Wade discusses who the best (or the worst) candidates are, for a Reverse Mortgage.
  • Wade talks about the idea of getting people to think about incorporating this strategy with overall Retirement Planning.
  • Four general ways to manage a Sequence Of Returns Risk: 1) Spend conservatively. 2) Be very flexible with spending. 3) Eliminate volatility from the portfolio. 4) Have a buffer asset.
  • How a Reverse Mortgage would fit for someone who’s looking at self-financing a Long-Term Care Plan.
  • You have to be living in the home, to maintain a Reverse Mortgage.
  • Some of the ‘big picture’ things that you should be aware of, when considering a Reverse Mortgage.


Wade’s website: http://www.retirementresearcher.com

Wade’s book, Reverse Mortgages- How To Use Reverse Mortgages To Secure Your Retirement, is available from Amazon.

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