A research brief released this week from the Boston College Center for retirement research presents a simple message on nearing retirement: worry less about asset allocation and look to other, more effective tools including reverse mortgages.

“The traditional emphasis on the importance of asset allocation might lead one to believe that the best way to improve retirement security is to adopt the perfect mix of stocks and bonds,” write the brief authors. “However, households nearing retirement have more effective levers available that tend to fly under the radar: delaying retirement, taking a reverse mortgage, and controlling spending.”

These present more “potent” alternatives than asset allocation for most households, the brief finds.

In terms of home equity, the typical U.S. household has about $140,000 in home equity, making it the largest asset outside of social security, according to the research. Yet few seniors tap their equity to help support their retirement consumption, it says.

Often the work of financial planners, while they spend considerable time and energy advising on investment of savings, can be lost on the average household, which simply lacks adequate savings, the Boston College research notes.

“Fortunately, people have a number of other levers that can affect their retirement security,” the brief writes. “And these strategies – unlike the stock market – are within the individual’s control: working longer, using a reverse mortgage to access home equity, and controlling consumption when the kids leave home. Moreover, even for many with substantial assets, these non-financial levers may be as powerful as asset allocation in attaining retirement security.”

View the full study brief.

Written by Elizabeth Ecker