How Retirees Are Using Reverse Mortgages as a Planning Tool

Short answer: Beyond covering immediate expenses, homeowners increasingly use an untapped reverse mortgage line of credit as a standby resource — a way to avoid selling investments at a loss during a market downturn, or simply a cushion for the unexpected.

The “standby” line of credit strategy

Rather than drawing on a reverse mortgage right away, some homeowners open one and leave it largely untouched. The unused portion can grow over time, increasing future borrowing capacity — giving them a resource to draw from during a market downturn instead of selling investments while prices are low.

Delaying Social Security

Some retirees use reverse mortgage proceeds to cover living expenses for a few years, allowing them to delay claiming Social Security and receive a larger monthly benefit later. Whether this makes sense depends entirely on individual circumstances — this isn’t financial advice, and it’s worth discussing with a financial advisor.

Covering healthcare and long-term care costs

Home equity is often a retiree’s largest asset outside of retirement accounts. A reverse mortgage can convert that equity into funds for healthcare costs, home modifications for aging in place, or in-home care — without selling the home.

Funding a move without a new monthly payment

As covered in our HECM for Purchase article, some retirees use a reverse mortgage to buy a new, better-suited home without taking on a new monthly mortgage payment.

This is a real financial tool — treat it like one

A reverse mortgage isn’t right for every situation, and it isn’t tax or financial advice from us — but it’s a legitimate part of retirement planning for many homeowners, not a last resort.

Talk through your specific plan

Talk to us — we’ll give you a straight answer about whether this fits your goals.