The Long View

Don Graves and Wade Pfau: How Home Equity Affects Retirement Planning

Jun 25, 2024

Don Graves and Wade Pfau discuss the benefits of utilizing home equity in retirement planning, focusing on reverse mortgages like the HECM. They explore strategies for leveraging home equity, managing risks, and the impact on financial strategies. The podcast delves into regulatory changes, protections, legacy planning, and utilizing housing wealth for responsible retirement income planning.

58:27

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Episode guests

Wade Pfau

Don Graves

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Episode notes

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Quick takeaways

Strategic use of reverse mortgages can enhance retirement income and provide a buffer asset during market downturns.

HECM program offers standardized access to home equity with protections for non-borrowing spouses and financial assessments.

Regulatory updates in the mid-2010s strengthened the HECM program, ensuring responsible usage and consumer protections.

Deep dives

Benefits of Reverse Mortgages in Retirement Planning

Reverse mortgages provide a way for retirees to tap into their home equity as part of their retirement income planning. Don Graves and Wade Fau highlighted how using a reverse mortgage strategically can help manage income and serve as a buffer asset during market downturns. By allowing for the growth of a line of credit, retirees can gain more flexibility and potentially leave a larger legacy at the end of retirement.

Intro

5min

History, Regulations, and Protections of Reverse Mortgages

21min

Strategies for Leveraging Home Equity in Retirement Planning

3min

Utilizing Home Equity with Reverse Mortgages for Retirement Planning

8min

Risks and Considerations of Reverse Mortgages

17min

Exploring the Considerations of Using a HECM in Retirement Planning

3min

Exploring the Impact of Home Equity on Retirement Planning and Financial Strategies

3min

Today we have two guests on the podcast, Don Graves and Wade Pfau. Don Graves is the president and founder of the Housing Wealth Institute and an instructor of Retirement Income at The American College of Financial Services. He is considered one of the nation’s leading educators on incorporating housing wealth into retirement income planning. He is also the author of three books, Housing Wealth: An Advisor’s Guide to Reverse Mortgages, Housing Wealth Conversations, and The Retiree’s Guide to Housing Wealth. He graduated from the Fox School of Business at Temple University.

Wade Pfau is professor of retirement income in the Financial and Retirement Planning Program at the American College of Financial Services. He is also co-director of the American College Center for Retirement Income and Retirement Income Certified Professional program director at the American College. Pfau has written several books, including his most recent Retirement Planning Guidebook. He is a co-editor of the Journal of Personal Finance, and he publishes frequently in a wide variety of academic and practitioner research journals. Pfau holds a doctorate in economics and a master’s degree from Princeton University and Bachelor of Arts and Bachelor of Science degrees from the University of Iowa. He is also a chartered financial analyst.

Background

Don Graves: Bio

The American College of Financial Services

Books: Housing Wealth: 3 Ways the New Reverse Mortgage Is Changing Retirement Income Conversations

The Retiree’s Guide to Housing Wealth

Wade Pfau: Bio

Books: Retirement Planning Guidebook

Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement

Journal of Personal Finance

Reverse Mortgages

Home Equity Conversion Mortgage (HECM): Definition, Eligibility

Sandra Timmermann