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Written by: Cheryl Canzanella | Movement Mortgage
For years, many financial professionals have treated home equity as a last resort—something to tap into only after every other option has been exhausted. It was the fallback plan. The “just in case.”
But today’s retirement landscape looks very different. Clients are living longer. Markets are more unpredictable. And the pressure on income strategies is greater than ever.
Given all that, we have to ask ourselves…Is leaving home equity out of retirement planning a harmless oversight, or are we missing one of the most powerful and underutilized tools available?
Because here’s the reality: The average retiree has more wealth tied up in home equity than in their retirement accounts https://www.federalreserve.gov/econres/scfindex.htm, and about half are still making mortgage payments https://mrdrc.isr.umich.edu/publication/the-house-is-it-an-asset-or-a-liability/.
If we’re truly putting our clients’ best interests first, how can we ignore that?
Shouldn’t we be using every tool available to help them retire with more confidence, stability, and freedom?
Here are four reasons the financial industry has overlooked this vital asset class and how this can be an opportunity for you.
1. Oversight and Avoidance
For many clients, their home is the biggest asset they own. Yet it’s often left out of the retirement planning conversation. Not because it lacks value, but because most financial planners were never trained to include it as part of a financial strategy. It’s often viewed as someone else’s responsibility or reserved for emergencies. And since planners don’t talk about what they don’t fully understand, that silence is costing clients real options for greater financial security, flexibility, and peace of mind in retirement.
Compliance isn’t helping either. Instead of navigating the gray areas or following written supervisory procedures, many firms just tell financial planners not to bring it up at all. But that kind of avoidance doesn’t protect the client…it just protects the system from having to evolve. In fact, it may put the client is a
Meanwhile, this significant asset just sits there. It’s not volatile. It’s not taxable. It doesn’t move with the markets. And yet, we spend endless hours trying to manage risk, withdrawal rates, and longevity, while ignoring one of the most stable resources on the client’s balance sheet.
2. Outdated Reputation, Modern Reality
It’s true, reverse mortgages have a checkered past. Stories of widows losing their homes left deep scars across the industry. But what’s often overlooked is that those stories stemmed from a specific issue: younger, non-borrowing spouses weren’t protected under the old rules.
Thankfully, that changed a long time ago. Today’s reverse mortgage, specifically the federally insured HECM, is a very different product. It comes with built-in spousal protections, oversight from the FHA, and multiple layers of regulation. In fact, it’s now one of the most heavily scrutinized lending tools available.
Let’s also not forget annuities were once viewed the same way: complicated, misunderstood, even distrusted. But with proper education and regulation, they earned a place in retirement planning.
Reverse mortgages are on that same path, slowly shedding their outdated image and becoming a valuable, well-researched strategy for the right clients—a clear opportunity for forward-thinking financial planners.
3. Benefits Hiding in Plain Sight
Nearly half of retirees enter retirement still carrying a mortgage. And eliminating that monthly payment? It can be a game-changer for their cash flow.
But that’s just the beginning.
A reverse mortgage offers more than just payment relief. It can provide:
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No monthly mortgage payments (as long as the homeowner keeps up with property taxes, insurance, and maintenance).
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Access to home equity as a flexible retirement resource.
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Non-recourse protection, which means heirs aren’t left holding the bag if the loan balance exceeds the home’s value.
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Built-in insurance to prevent the risk of being “underwater.”
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Disaster-proof access to funds—unlike HELOCs, which can be frozen during economic downturns or natural disasters, reverse mortgage lines of credit stay open, even if the home is damaged or destroyed.
Think about that last one. After a fire, flood, or hurricane, what would your client rather have… equity they can’t touch, or a line of credit that’s still available, no questions asked?
This isn’t wishful thinking or radial. These benefits are backed by decades of academic research.
It’s a complete shift in retirement thinking.
4. It’s Missing from Financial Planning Software
Most financial planning software shows home equity on the client’s balance sheet, but it typically stops there. And when a reverse mortgage feature is available, it’s often limited, oversimplified, misunderstood or often not used at all. If planners can’t see those outcomes modeled clearly, they can’t communicate or implement them confidently.
As Dr. Wade Pfau’s research and Monte Carlo simulations have shown, incorporating home equity, particularly through a coordinated strategy involving a reverse mortgage, can meaningfully increase a retiree’s probability of success. That can lead to more confident clients and, let’s be honest, a stronger advisory relationship. It can also reduce pressure on the investment portfolio. Which could mean more stability, more flexibility, and more protection for assets under management.
From Missed Potential to Meaningful Planning
With over $14 trillion in home equity held by Americans age 62 and older https://nationalmortgageprofessional.com/news/senior-home-equity-reaches-14-trillion, it's clear this resource can no longer be overlooked. The conversations are shifting and so should our planning.
Advisors who incorporate housing wealth into their planning don’t replace their strategies; they strengthen them. They position themselves in a favorable position to meet the changing needs of today’s retirees.
If we’re serious about putting clients’ needs first, it’s time to break the silence bring home equity into the conversation and into the center of retirement planning…where it belongs.