Ted and Sandy were savvy investors.

They studied the stock market carefully and were cautious with a low tolerance for risk. Retirement gave them more time to devote to the market. Both had sizeable 401k’s that produced very good returns.

One night as they were sharing the moment with a glass of wine, Ted mentioned that he wished they could get some equity out of their home, which was almost paid for. His desire was to use the proceeds to invest in real estate in order to diversify, since their stock portfolios were by far their largest liquid asset.

It seemed right to put some money in another form of investment.

He did not want to refinance the existing loan that would force them to pay mortgage payments any longer than necessary. Charley, their C.P.A. for more than 25 years, suggested a Reverse Mortgage. He explained that Ted and Sandy would be able to pay off the existing mortgage, pull some equity out of their residence and would have no monthly mortgage payment to diminish their monthly cash flow.

They took Charley’s advice and obtained a Reverse Mortgage.


1- Eliminated monthly mortgage payment

2- Proceeds of the Reverse Mortgage were used to purchase residential rental property that provided more diversity in their investment portfolios

3- Rental income provided more cash flow, which allowed Ted and Sandy to keep from drawing money from their 401k’s every month to live on.