Sequence-of-returns risk can derail an otherwise sound retirement plan. When clients are forced to sell investments during a market decline, they lock in losses and reduce the assets available to participate in the recovery.

A standby reverse mortgage line of credit can provide another source of liquidity.

The line is established while the client is financially stable, left unused, and available during down markets. Instead of withdrawing from the portfolio at the wrong time, the client can temporarily access home equity and give invested assets more time to recover.

Unlike a traditional HELOC, the available line generally cannot be frozen or reduced as long as the borrower continues to meet the loan requirements. The unused portion of the line can also grow over time, which is why establishing it earlier may create substantially more available credit later.

This strategy may help advisors:

Reduce the need to hold excessive cash reserves

Limit portfolio withdrawals during market downturns

Manage sequence-of-returns risk

Create tax-efficient liquidity from loan proceeds

Preserve greater flexibility throughout retirement

It is not appropriate for every homeowner. The client must continue living in the home as a primary residence and remain current on property taxes, homeowners insurance, maintenance, and other property-related obligations.

Let’s Review a Client Scenario

If you have a client age 62 or older with meaningful home equity and a portfolio you are working to protect, let’s model the strategy using their actual numbers.

You remain the lead advisor. I serve as the reverse mortgage specialist, helping you evaluate the available options, projected line-of-credit growth, costs, and potential role within the retirement plan.

Schedule a private 1:1 strategy session.