Most financial advisors are uninformed and misinformed when it comes to the importance of reverse mortgages, and it’s time for this to change.
This is the founding principal of the Funding Longevity Task Force, a team of financial planning experts and academics who are committed to promoting research about the various ways reverse mortgages can be used to improve one’s financial outcome in retirement.
They’ve recently added two more to their team to aid in the mission, announcing last week the addition of Pete Neuwirth, an actuary and former senior consultant at Willis Towers Watson, and Barbara Stucki, an expert in policies on aging and former vice president at The National Council on Aging.
Founded in 2012 by Synergy One Lending President and CEO Torrey Larsen and Longevity View Associates Principal Shelley Giordano, the 13-member task force includes a slew of well-respected experts, Ivy League degrees and PhDs abound. (See below for a full list of members.)
The Task Force advances the cause by publishing content about the role housing wealth can play in retirement, promoting research illustrating the benefits of its use, giving interviews as subject matter experts to media outlets and speaking at industry events.
Over the years, their dedicated efforts helped move the needle, according to Giordano, Task Force chair.
“We are encouraged with the response we are seeing both in the media and with financial services professionals, especially following the Housing Wealth in Retirement Symposium we hosted with the Bi-Partisan Policy Center in Washington last April,” said Giordano.
The Task Force also made headway when it partnered with The American College of Financial Services in 2016 in an effort to expand research on reverse mortgages and home equity in retirement planning, bringing on the college's director of retirement income, Jamie Hopkins, to lead the group.
But perhaps its biggest win was prompting the Financial Industry Regulatory Authority to re-evaluate its official stance on HECMs, which for years it had labeled a “loan of last resort.”
Task force member Barry Sacks confronted FINRA with a published quantitative analysis illustrating that – when used strategically early in retirement – a HECM could improve one’s overall financial position. FINRA conceded and removed the label from its investor alerts, instead advising that it be “used prudently” (much like any financial product).
If you look up articles about reverse mortgages in major news outlets like The New York Times, Forbes or The Wall Street Journal, chances are a member of the Task Force is quoted, weighing in on the topic.
Still, Giordano says they have lots of work to do. They recently wrote a letter to the Washington Post about an article in which an advisor described a reverse mortgage as a last resort.
“Six years later, we still have advisors out there who, without a shred of evidence, are telling retirees to use a reverse mortgage only as a last resort, even though academics have demonstrated over and over that’s the worst way to use it,” she said.
“When you use the HECM as a last resort, your cash flow and your portfolio have already been depleted,” Giordano said. “This is a pretty huge hole, so retirement income experts suggest the coordination of housing wealth with other assets throughout retirement in order to help protect against catastrophes.”
Giordano said it’s all about having a safety net in place.
“Everyone knows that the longer you live, the greater chance that bad things are going to happen. Why not prepare for this with an asset you already have in place?”
The Funding Longevity Task Force:
- Shelley Giorodano, MA – Chair, co-founder and author of What’s the Deal With Reverse Mortgages?
- Marguerita Cheng, CFP – CEO of Blue Ocean Global Wealth
- Tom Davison, MA, PhD, CFP – Partner emeritus at Summit Financial Strategies
- Wade Pfau, PhD, CFA – Professor of retirement income at The American College of Financial Services
- Barry Sacks, PhD, JD – Former physicist and a tax and pension lawyer
- Jamie Hopkins, Esq., LLM, CFP, ChFC, CLU, RICP – Director of the New York Life Center for Retirement Income at The American College of Financial Services
- Curtis Cloke, CLTC, LUTCF, RICP – CEO and founder of Thrive University
- Betty Meredith, CFA, CFP, CRC – Managing member at Int'l Retirement Resource Center
- Anna Rappaport, F.S.A., M.A.A.A. – Anna Rappaport Consulting
- Steve Thomas, CLU, ChFC, LUTCF – PlanAmerica LLC
- Sandra Timmermann, Ed.D – Former director of MetLife’s Mature Market Institute
- Pete Neuwirth, FSA, FCA – Actuarial consultant, author
- Barbara Stucki, PhD – BR Stucki Consulting, former CEO of Nestcare