Home Equity / Reverse Mortgages

[flyingpylon]

I'm curious to know if anyone is (or has considered) using home equity as a more active part of their retirement income strategy, beyond just the typical asset of last resort or legacy asset.

A case can be made that a tool like a reverse mortgage (and more specifically a reverse mortgage line of credit) can help to delay social security, mitigate sequence of returns risk, absorb spending shocks, pay for long-term care, etc. and end up leaving a larger amount in the end. Wade Pfau makes that case in his book Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement and there are others out there.

Reverse mortgages look expensive in isolation (just as the other assets we discuss here have various issues in isolation). But perhaps it makes sense to take a more holistic view of our assets and the flexibility they could provide as buffers for the primary investment portfolio. Or not. Obviously if the investment portfolio is more than sufficient then it doesn't matter as much, but not everyone is so fortunate.

Any thoughts? Has anyone gone beyond the myths and misconceptions to actually run some numbers and decide one way or the other? The situation has to be right but it's an interesting strategy.