by Barry H. Sacks, J.D., Ph.D., and Stephen R. Sacks, Ph.D.
This paper examines three strategies for using home equity, in the form of a reverse mortgage credit line, to increase the safe maximum initial rate of retirement income withdrawals.
These strategies are:
- the conventional, passive strategy of using the reverse mortgage as a last resort after exhausting the securities portfolio; and two active strategies
- a coordinated strategy under which the credit line is drawn upon according to an algorithm designed to maximize portfolio recovery after negative investment returns,
- drawing upon the reverse mortgage credit line first, until exhausted.
Full paper here.