The media has been picking up on these developments as of late, and coverage is improving. But the trend of positive coverage is still a new phenomenon, and with so much pre-existing bias, it can be hard to view reverse mortgages objectively without a clear understanding of how the benefits exceed the costs. To understand their role, it is worth stepping back to clarify the retirement income problems we seek to solve. My next column will provide an overview of how reverse mortgages can fit into a retirement income plan.
Wade D. Pfau, Ph.D., CFA, is a professor of retirement income in the Ph.D. program in financial services and retirement planning at The American College in Bryn Mawr, Pa. He will speak on reverse mortgages at Financial Advisor's Inside Retirement conference in Dallas on May 11. He is also a principal and director at McLean Asset Management and the chief planning scientist for inStream Solutions. He actively blogs at RetirementResearcher.com.