Tom Hegna is no stranger to Retirement Income Planning. His Books and PBS special entitled “Don’t Worry Retire Happy” remain a favorite among advisors and PBS affiliates across the country. It just aired in the Philadelphia this past weekend! http://tomhegna.com/about-tom/
Last week, I was honored to be one of three presenters at an Advanced Retirement Income strategies conference where Tom Hegna and Curtis Cloke also presented. Tom had not heard some of the recent research regarding the HECM Reverse Mortgage as part of a comprehensive Retirement Income Plan. And after I spoke, this is what he said:
Tom Hegna author of the book Don’t Worry Retire Happy and the public television special. I just got a chance to sit through Don Graves’ presentation and I tell you it’s really changed the way I think about a reverse mortgage. How you really should establish that line of credit, how it can protect you in case markets fall, housing markets. It gives you a lot of flexibility in retirement, you can turn it into income, there’s just so many uses, it’s worth it to check out his stuff
Three very important concepts about HECM Reverse Mortgages in Retirement Outcomes Tom mentions:
1. Establishing a HECM Line of Credit Early…
particular at the onset of retirement allows tremendous financial planning flexibility. Most advisors have no idea about the power of this strategy. They are still viewing the HECM as a product of last resort. Which has been proven to be the least effective usage of the tool.This is exactly what Dr. David Littel of the American College recently said in a Bloomberg article
“…he plans to open up a reverse mortgage letter of credit. That allows him to lock in the ability to borrow against their home. If the stock market goes down, it can be a good way to supplement income without having to sell investments in a down market, or having to take money out of a retirement account early and pay taxes and penalties on it”
It was also echoed by Dr. Wade Pfau in this post THE HIDDEN VALUE OF A REVERSE MORTGAGE STANDBY LINE OF CREDIT
2. Understanding that the HECM can be a powerful Tool to Mitigate Risk in Retirement.
There are 18 risks in the retirement income phase that don’t necessarily exist, or have the same impact as in the accumulation phase. Things such as (a) Longevity Risk (b) Inflation Risk (c) Long Term Care Risk (d) Sequence Risk just to name a few.What Tom Hegna and other advisors are discovering is that Housing Wealth is a powerful Risk Mitigator. Especially establishing the HECM line of credit. Because the HECM line of credits unique features, it can address all (4) of the aforementioned risks plus several others. It is really an indispensable tool in retirement income planning.
The 7 Differences Between a Reverse Mortgage Line Of Credit and Bank Line Of Credit
3. It’s Worthwhile for Advisors to Learn about the HECM from Don Graves.
That was nice of Tom to say. And whether it’s from me or someone else, it is critical for advisors to learn the 31 reverse mortgage retirement strategies.
It’s a fact, the baby boomers are facing a retirement Tsunami. They will live longer in retirement than any other previous generation, they are highly indebted and they have not saved nearly enough. Dr. Sandy Timmerman, founder the Met Life Mature Market Institute says that Reverse Mortgages are the “Boomers Salvation”
Every advisor who wants to help their retired clients have the best shot at a successful retirement must become knowledgeable about HECM reverse mortgages. Not the ones that you see on TV, but the ones that are being talked about at FINRA, the SEC, the Wall Street Journal, the Financial Planning Association etc.
Housing wealth has now become an integral part of a comprehensive retirement income plan. And there is emerging a gap between the advisors who know how to strategically implement it and those who do not.
Thanks again to Tom Hegna for his work, advocacy and genuine humility in being a champion of sustainable retirement outcomes. I’m glad Tom sees a vital role for reverse mortgages.