Reverse Mortgage Research: What the Studies Say

I am Christopher Gibson, and here is how I handle a skeptical financial advisor: I do not argue, I send research. So below is the independent, peer-reviewed reverse mortgage research that changed how planners think about home equity. I have summarized it plainly, with links so you can read it yourself.

Updated August 16, 2026

What the reverse mortgage research actually found

The short version is a real reversal. For years, conventional advice said to tap home equity only as a last resort. Then a series of studies tested that assumption with actual portfolio modeling, and the results pushed the other way. Researchers like Wade Pfau, the Texas Tech team, and the Sacks brothers put that to the test. They found that coordinating home equity with a portfolio, rather than saving it for the end, often produced better outcomes. In other words, the timing of when you draw matters as much as whether you draw.

Reverse mortgage research on the standby line of credit

The clearest idea to come out of this work is the standby line of credit. John Salter, Shaun Pfeiffer, and Harold Evensky at Texas Tech published it in the Journal of Financial Planning in 2012. The setup is simple: you open a reverse mortgage line of credit and leave it idle. Then, in a year when your investments are down, you draw from the line instead of selling stocks at a loss. As a result, the portfolio gets a chance to recover. Overall, their models showed better portfolio survival without shrinking what was left to heirs. A follow-up went further. In fact, under low-rate assumptions, and a home value near the portfolio size, they found a sustainable withdrawal rate could rise meaningfully.

Coordinating withdrawals to make the money last

Similarly, Barry and Stephen Sacks reached the same place from a different angle. In their 2012 Journal of Financial Planning article, they tested a coordinated strategy. The idea is simple: draw from the reverse mortgage in the years right after a market loss, and from the portfolio otherwise. Because that avoids selling low, the odds the money lasted a full 30 years went up. Notably, in many runs the coordinated approach even left more total wealth to heirs than never touching the home at all. Indeed, that result surprised a lot of planners, and it is a big reason the conversation changed.

Sequence-of-returns risk and the buffer asset

Finally, Wade Pfau, PhD, CFA, tied these threads together around sequence-of-returns risk, the danger that losses early in retirement do lasting damage. His point is simple. A reverse mortgage line of credit can serve as a buffer asset, a pot that does not move with the market. So after a downturn, you can spend from it and leave your investments alone. He also stresses timing. Because the unused line of credit grows over time, opening one earlier can leave more available later, exactly when you may need it.

What regulators and nonprofits add

The academic work does not stand alone. For instance, the Consumer Financial Protection Bureau studies reverse mortgages closely and publishes consumer guidance. In addition, the National Council on Aging offers a plain booklet on using home equity to stay at home. Likewise, the Boston College Center for Retirement Research has long argued that home equity is an underused retirement resource. Taken together, they point the same way. The regulators focus on protections, and the researchers focus on strategy. Both say the same thing: this deserves a serious look, done carefully.

The honest caveat

Here is what the reverse mortgage research does not say. It does not say a reverse mortgage is right for everyone, and it does not promise any particular result. Every study rests on assumptions about rates, returns, and how long you stay in the home, so real life will differ. So think of this as evidence to weigh, not a verdict. The right next steps are independent counseling and an honest look at your own numbers. Not sure where you land? Try the is-it-right-for-me tool.

Where to read the reverse mortgage research yourself

Do not take my word for it. Start with Wade Pfau’s overview in Forbes. Then read the Financial Planning Association’s Journal of Financial Planning, the CFPB, the National Council on Aging, and the Boston College Center for Retirement Research. For the basics alongside the research, see the reverse mortgage guide and how it works.

Frequently asked questions

What does the research say about reverse mortgages?

In short, that a reverse mortgage can be a legitimate retirement planning tool, not just a last resort. Peer-reviewed studies in the Journal of Financial Planning are clear. A standby line of credit can help a portfolio last longer, mainly by avoiding forced sales in down markets. Still, the research shows strategic value, not that it fits everyone.

Who are the main reverse mortgage researchers?

The names that come up most are Wade Pfau, PhD, CFA, the Texas Tech team of Salter, Pfeiffer, and Evensky, and Barry and Stephen Sacks. Much of their work appeared in the Journal of Financial Planning.

Does research say a reverse mortgage helps a portfolio last longer?

In several studies, yes, when it is used strategically. For example, drawing from a reverse mortgage line of credit in down years, instead of selling investments at a loss, improved portfolio survival in the models. However, results depend on the assumptions, so treat them as evidence, not a promise.

Is a reverse mortgage still considered a loan of last resort?

Not in the current research. Over the past fifteen years, retirement researchers have moved toward viewing it as a planning tool. That said, reputation and reality both matter, so the honest answer is that it depends on your situation.

Have more questions? See our full reverse mortgage FAQ.

Is the interest on a reverse mortgage tax deductible?

Usually not much of it, and not the way people hope. Two rules get in the way. First, reverse mortgage interest is deductible only in the year it is actually paid, not as it accrues, and most borrowers pay nothing until the loan ends, so there is no yearly deduction to take. Second, only the portion that is home acquisition debt counts as deductible mortgage interest, meaning money used to buy, build, or improve the home, or to pay off the original purchase loan. Cash you draw to live on is home equity debt, and under current law that interest is generally not deductible. On top of that the standard deduction is high, especially at age 62 and up: for 2026 it is 16,100 dollars single or 32,200 dollars married, plus an age-65 add-on and a temporary senior bonus of up to 6,000 dollars through 2028, so a single year of paid interest rarely clears the bar to itemize. There is a planning move around the timing rule. Because interest counts only when paid, some borrowers make a voluntary lump-sum interest payment every few years, or in a high-income year such as a large Roth conversion, to bunch enough deductible interest into one year that itemizing beats the standard deduction. It only helps on the acquisition-debt portion, and voluntary payments are applied to insurance and servicing fees first, then interest, so it takes planning. This is general information, not tax advice, so bring the specifics to your CPA. Sources: IRS Publication 936, Kitces on HECM interest deductions, and the age-65 standard deduction.

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