Braxton, too, has yet to recommend them to clients but has helped people on a pro bono basis who have used them. "If you need the money to live, you're going to tap it, but people have to understand the consequences," she said. "If it's your last asset and you deplete it, you're done. You have to have a Plan B."
Yet not all advisors are down on reverse mortgages. John Salter, a CFP and wealth manager with registered investment advisor Evensky & Katz Wealth Management, thinks that everyone should at least be considering them as part of their retirement planning.
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Salter, who holds a Ph.D. in financial planning, is particularly keen on the Home Equity Conversion Mortgage (HECM) Saver, a line of credit developed and insured by the Federal Housing Administration in 2010. It has more limitations on the amount you can take out in the first year than previously, but the upfront fees are lower, and borrowers can pay off the loan without penalty.
In a paper co-authored with colleague Harold Evensky and Shaun Pfeiffer, an associate professor at Edinboro University in Pennsylvania, Salter argues that this more affordable and flexible line of credit can be used in conjunction with investment portfolio management to help people stretch their savings significantly further. "Now is a particularly good time for [reverse mortgages], with interest rates so low," said Salter. "If I were 62 years old, I would be getting one."