How Can a Reverse Mortgage Help Supplement Retirement Income?

A reverse mortgage can be a powerful way to supplement retirement income, especially for homeowners who are “house rich but cash poor.” If you’re 62 or older and have built up equity in your home, a reverse mortgage allows you to tap into that equity and turn it into tax-free cash — giving you the financial flexibility to enjoy retirement with less stress.

Instead of selling your home or dipping into your savings, you can stay right where you are and access money that’s already yours — all without taking on new monthly mortgage payments.

Here’s how a reverse mortgage can help supplement your retirement income:

1. Create a monthly stream of income
You can choose to receive monthly payments from your reverse mortgage, much like a paycheck. This can provide a consistent, reliable source of income to help cover:

• Day-to-day living expenses 
• Groceries and household bills 
• Gas, transportation, or car maintenance 
• Entertainment, hobbies, and travel

2. Set up a growing line of credit

A reverse mortgage line of credit grows over time and is available when you need it — kind of like a financial safety net. You don’t pay interest on it until you use it, and it can be a great backup plan for unexpected expenses.

3. Pay off an existing mortgage or eliminate monthly payments

One of the smartest ways to use a reverse mortgage is to pay off your existing traditional mortgage. That means no more monthly mortgage payments — which can free up a big chunk of your budget each month.

4. Cover large or occasional expenses without draining your savings

Many retirees worry about running out of money or being forced to dip into their nest egg too soon. A reverse mortgage can be used strategically to cover larger costs, helping preserve your retirement savings and investments longer.

A reverse mortgage doesn’t replace your retirement income — it adds to it. It’s a way to turn the home you’ve worked so hard to pay off into a source of security and freedom in retirement. Whether you need consistent monthly income, a safety net, or a lump sum for a specific need, a reverse mortgage gives you options — on your terms.

Learn more about eligibility requirements for a reverse mortgage, situations where a reverse mortgage is best used, and common myths around reverse mortgage that we debunk with facts