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Real Estate Transactions : August 1, 2025 Dream Finders Homes launches sales at Hidden Creek in Frederick WeeCasa launches ‘Plan & Peek’ tour series for event planners Are you a real estate professional? 5 key tips for buying a fixer-upperWhen most people think about retirement planning, they envision options such as 401(k)s, IRAs, pensions, and possibly Social Security. But what if I told you there’s another powerful tool that’s often overlooked, and it is sitting right under our feet?
That tool is home equity, and financial advisors across the country are beginning to help their clients use it more strategically through something called a reverse mortgage.
Let’s break down why this makes sense and how it might be the right move for many retirees.
Your Home Is More Than a Roof, It’s a Resource
For most people over 55, their house is their biggest asset. You’ve worked hard to pay off your mortgage or build equity over time. However, that wealth is locked up and is illiquid unless you sell your home or borrow against it.
A reverse mortgage enables homeowners aged 55 and above to convert a portion of their home equity into tax-free cash, without relinquishing ownership or relocating. The money can be used as the homeowner sees fit; there are no restrictions on its use, and no monthly mortgage payments are required. (The homeowner must always pay property taxes, homeowner’s insurance, and maintain the home.)
Why financial advisors are paying attention
More advisors are including reverse mortgages in their retirement planning strategies, and here’s why:
Boost monthly cash flow
Retirees often live on fixed incomes. A reverse mortgage can replace or supplement income, reducing stress and increasing peace of mind.
Protect retirement investments
Instead of selling off stocks when the market dips, retirees can draw from their home equity, giving their portfolios time to recover.
Build a “safety net” that grows over time
One unique feature of a reverse mortgage line of credit is that the unused portion grows, providing clients with more access to funds later, even if their home’s value doesn’t increase.
Stay in the home you love
The funds can be used for home repairs, renovations, or even in-home care, making it easier to age in place comfortably and safely.
Plan for the unexpected
Whether it’s medical bills, home repairs, or a global pandemic, having access to home equity can help retirees weather financial storms and life’s unknowns.
Create a tax-friendly plan
The cash received from a reverse mortgage isn’t considered taxable income. This makes it a smart way to manage taxes while still covering expenses.
Help loved ones now versus later
Some retirees want to help kids or grandkids while they’re still alive. A reverse mortgage allows them to give gifts, pay tuition, or support loved ones without draining other savings.
Keep other investments growing
Instead of tapping into IRAs or brokerage accounts, using home equity allows investments to grow over a longer period, leading to greater long-term financial health.
Flexible options to meet different goals
Clients can choose how they receive the money from a reverse mortgage. Either a lump sum, a monthly payment plan, or a growing line of credit. Some use it to pay off an existing mortgage, while others use it for travel or healthcare.
You still own your home
One of the biggest myths is that the bank owns the home. Not true! With a reverse mortgage, you’re still the homeowner, with your name on the title.
A tool for planning, not just a last resort
In the past, reverse mortgages were often viewed as a last resort for individuals facing financial difficulties. But that’s changing, and very quickly. More and more financial experts, including researchers such as Dr. Wade Pfau and Barry Sacks, have studied reverse mortgages and found that they can help retirees avoid running out of money, not just delay it.
It’s time to rethink how we approach home equity. After all, why let your biggest asset just sit there when it can help you live a better life now?
Ask your financial advisor
If you’re a homeowner over 55 or work with retirees, it’s worth asking about reverse mortgages. Talk to a qualified mortgage professional who understands the ins and outs of reverse mortgages. It is time that you start living for today and planning for tomorrow!
Gabe Bodner is a retirement mortgage planner and licensed mortgage originator in multiple states. Gabe utilizes the latest research from the top researchers to assist his clients in living for today and planning for tomorrow. To reach Gabe, call 720.600.4870, e-mail gabe@bodnerteam.com or visit reversemortgagesco.com.
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