Harold Evensky, Professor- Texas Tech University  Monte Carlo Studies – Reverse Mortgage – Survivability 

It has come to my attention that a lot of financial planners missed the ground-breaking study regarding reverse mortgages that was published in the Journal of Financial Planning a few years ago.   The study showed that reverse mortgages, obtained early in retirement, (including the high-wealth client), increased cash flow and net worth, and hence is not the loan of last resort, that was previously thought. 

I am of that study by Harold Evensky, CFP, AIF, and  John Salter, PhD, CFP, AIFA and co-authors.

Dr. Salter uses Monte Carlo scenarios implementing a Home Equity Conversion Mortgage (HECM) as a risk management tool as early as age 62.  It increased survivability rates of retirement assets from 50% to over 90%. 

Many professional senior advisors do not consider the use of a tool like HECM when their clients have significant retirement funds, but as Dr. Salter reports in his study, the HECM increased the client’s cash flow and net worth in the overwhelming majority of cases, regardless of the pre-existing wealth level of the client.  

I am a CPA and am one of the few trained Reverse Mortgage Planners in Washington State.    In relation to liability, asset and retirement cash flow, there is a lot of overlap in our positions as consultants to our clients.  I would be happy to meet you for lunch or happy hour, to talk with you about how we can mutually help our clients compare all loan and asset bucket options for sustainable retirement and cash flow. 

Click here to read the study in full.