Hopefully, the link to his article will get posted without any problems. Sometimes I have had problems.
Reverse Mortgages: Their Time Has Come - Registered Investment Advisor
In this he links to a JPF article touting how retirees can boost their SWR up above 6% with a reverse mortgage. I went to the article and the only think I saw was the paper increased a retirees portfolio of $800,000 with the max Federal reverse mortgage of $417,000. They then ran their version of FIRECalc and showed how a portfolio of $1.2MM could increase the SWR when the amount used to calculate the percentage was the original $800,000. Since the $417,000 never changed but inflated withdrawals did, the reverse mortgage at the end failed to support spending above 4.5% when calculated based on the $800,000.
I'm sure someone else will read through this article to see if I missed something in my quick read.
If I did get it right, this article is useless garbage. It's below the level that I would usually associate with the JFP although I have read some stinkers.
Unfortunately, this provides FPs additional info to through at mathematically challenged retirees to get them to "fee up" with a reverse mortgage to continue a lifestyle they can't afford. I didn't see anything in this article that would change my opinion that once the question of a reverse mortgage comes up a person is in a lifestyle they can't afford.
Reverse Mortgages: Their Time Has Come - Registered Investment Advisor
In this he links to a JPF article touting how retirees can boost their SWR up above 6% with a reverse mortgage. I went to the article and the only think I saw was the paper increased a retirees portfolio of $800,000 with the max Federal reverse mortgage of $417,000. They then ran their version of FIRECalc and showed how a portfolio of $1.2MM could increase the SWR when the amount used to calculate the percentage was the original $800,000. Since the $417,000 never changed but inflated withdrawals did, the reverse mortgage at the end failed to support spending above 4.5% when calculated based on the $800,000.
I'm sure someone else will read through this article to see if I missed something in my quick read.
If I did get it right, this article is useless garbage. It's below the level that I would usually associate with the JFP although I have read some stinkers.
Unfortunately, this provides FPs additional info to through at mathematically challenged retirees to get them to "fee up" with a reverse mortgage to continue a lifestyle they can't afford. I didn't see anything in this article that would change my opinion that once the question of a reverse mortgage comes up a person is in a lifestyle they can't afford.