How to Get Your Client to 70

Fox Business shared an article about making the decision to take Social Security benefits early, or put it off past full retirement age and take increased benefits at age 70. The article listed two reasons to wait until 70 and two reasons why clients should not.

Their reasons for waiting are:

* Client can increase benefits by 8% per year

* Client doesn’t have much retirement savings but is able to continue working

…while their reasons for cashing out early are:

* Client doesn’t expect to live very long

* Client needs the money and can’t continue working

All the reasons listed are sound advice for navigating the waters of retirement, which can be rough for even the most prepared retirees. However, the article does leave out a very viable solution for retirees who see themselves benefiting from early retirement, even if they would prefer to hold out until 70.

Enter the Reverse Mortgage. Utilizing a Home Equity Conversion Mortgage allows retirees to use their home equity as supplemental income to bridge the gap between 62 and 70, which means they can enjoy a manageable retirement that will reap even more benefits in the long run. Also using a HECM to pay off a traditionally amortizing loan can accomplish some of the same goals. For example, if a client is paying $1,600 a month in a monthly mortgage payment, you could, by eliminating that payment, create part or all of the income that early Social Security would have provided, thus allowing them to defer!

In a Social Security Deferral case study my good friend Dr. Tom Davison showed how using this bridging strategy helps retirees reach their retirement income goal. Utilizing the HECM allowed the client to not only only put off Social Security until age 70 where she enjoyed an 8% increase in payments, but also allowed her to preserve her IRA and other retirement savings accounts. In the long run, the HECM paid for itself by supplementing the income that she otherwise would have had to pull from her retirement accounts, impeding their growth.


Don Graves, RICP® is a Retirement Income Certified Professional and one of the Nation’s Leading Educators on the Emerging Role of Reverse Mortgages in Retirement Income Planning. He is president and founder of the HECM Institute for Housing Wealth Studies and an adjunct professor of Retirement Income at The American College of Financial Services. He has helped tens of thousands of Advisors as well as more than 3,000 personal clients since the year 2000.