Home Equity Conversion Financial Strategies

1. Mitigate Sequence of Returns Risk

Retirement plans look great when you assume consistent "average returns" for the life of the plan. What many retirees fail to factor in is that it is quite possible to have a few flat or negative years in the beginning of ones retirement. This creates a situation where there is financial dependence on a portfolio that is already being depleted by negative market conditions. 

2. Delay Social Security Distributions

I have seen sound arguments on both sides of the isle on this. However, if you are healthly and anticipate making it near or into triple digits, it can pay off to wait until the maximum retirement age, or hold off until age 70 to receive the maximum monthly amount offered. 

3. Spread Out Retirement Distributions

Strategically taking tax-free distributions from your HEC Line of Credit can reduce dependence on taxable distributions. 

4. Roth Conversions 

Reduced taxable income could create an opportunity to pay the taxes required to convert your IRA to a tax-free source of income down the road. 

5. Hedging vs Inflation 

Specifically with the HEC Line of Credit. Inflation will more than likely be accompanied by high interest rates. This will accelerate the growth of your HEC Line of Credit balance as the years roll on. 

6. Home Efficiency Upgrades

Solar, home insulation and an efficient HVAC system can be a great hedge against rising utility costs. If you do not have other sources of money available, using a HEC Loan can be a great option to protect your cashflow. 

7. Insurance 

Ensuring your are adequately insured is critical to protecting yourself in retirement. Improved cashflow can open opportunities for insurance such as: Life Insurance, Long Term Care Insurance, Extensive Health Insurance and others.