Extending Assets for a Longer Retirement

As life expectancy continues to rise, many retirees find themselves facing a financial dilemma—outliving their savings.

When Baby Boomers were born, the average life expectancy was 68 years. Today, it has increased to 79, and projections show that a baby born today has a one-in-three chance of reaching 100. Women, in particular, face an even greater challenge, as they tend to live longer than men.

At the same time, demographic shifts have changed the financial landscape. Birth rates in the U.S. have dropped by 50% since the late 1950s, while the overall population has more than doubled. This aging population means more retirees are relying on fixed incomes, yet many have not saved enough to sustain them through their extended lifespan.

The Reality of Financial Shortfalls in Retirement

According to the National Council on Aging:

• Over 27 million households with adults aged 60+ cannot afford basic living expenses.
• 60% of older adults would be unable to afford two years of in-home long-term care.
• While income for older adults increased modestly from 2018 to 2020, 60% saw a decline in their overall assets.
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With these challenges in mind, retirees must carefully plan how to stretch their assets while maintaining financial stability.

Case Study: Using Home Equity to Secure a Longer Retirement

Client Profile:

• Husband (71) and wife (68)
• Home value: $800,000
• Existing mortgage: $347,000 with a $2,200 monthly payment
• Current assets under management: Expected to last only 9 years based on the current burn rate.
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This couple faced a difficult situation, they risked running out of money within a decade. After consulting with a trusted financial advisor, they explored solutions to extend their assets and improve their financial outlook.

The Home Equity Solution

• Applied for a Reverse Mortgage loan to access their Home Equity.
• Approved for a $350,000 reverse mortgage loan
• By eliminating their monthly mortgage payment, significantly reducing their monthly burn rate
• Current assets under management expected to last 15 years, shifting their financial classification from a high C client to a more stable B client in the eyes of their advisor.
• Taxes and insurance still need to be paid annually

Conclusion: Securing a Financially Stable Future

By leveraging home equity with a reverse mortgage, these homeowners created a more secure and sustainable financial future. Without the burden of a monthly mortgage payment, they were able to extend their retirement savings by an additional six years—providing greater peace of mind and financial flexibility.

For Clients your concerned about outliving their savings, a reverse mortgage loan can be a strategic tool to maintain financial independence while extending and preserving their assets life.