1. To afford to remain in their home for the long term

    I don’t need to tell you how expensive things have become.  And for seniors who live in a state with high property taxes (hello, New Jersey!), it’s especially difficult to afford to stay.  But many seniors want to remain close to family and friends.  There’s often a lifetime of memories wrapped up in a home where they’ve raised their children.  It’s hard, though, when income is reduced during retirement.

  2. Make physical changes to the home that allow them to stay

    As we age, our homes aren’t always ideally suited for the needs of seniors.  But there’s a growing industry of products and services that allow seniors to “age in place.”  From making bathrooms safer (walk-in showers, grab bars, etc.), to replacing doorknobs with handles.  Handrails, ramps, and chairlifts can be installed, and laundry rooms can be relocated up to the main floor.

  3. Pay off debts

    Getting rid of an existing mortgage, credit cards, medical bills, car payments, etc. will help reduce financial burdens.  Many seniors find that once all of those are paid off, their monthly income is enough to make their cash flow sufficient to pay their regular expenses, without having to tap the reverse mortgage line of credit.  Their investments will likely also last much longer.

  4. To help family

    It’s no longer expected that every generation will automatically be better off financially than the previous one.  The Great Recession wiped out many younger people’s jobs and savings.  Sometimes a senior, even though they’re on a fixed income, will be able to help, by tapping some of the equity that has built up in their home over the years.  Other examples include contributing to a grandchild’s education, helping with medical bills, or a down payment on a first home.  Some seniors also use it to provide an advance inheritance to family members, so that they can live to see the results of their generosity.

  5. To finally be able to retire

    Some seniors continue to work because they truly enjoy their jobs, or want to remain actively employed.  However, too many are working because they have to, in order to make ends meet.  But after a lifetime of working to increase the equity in their homes, a reverse mortgage can allow their homes to start paying them back, and retire at long last.

  6. Dental work

    This is an often-overlooked need.  Medicare doesn’t pay for the vast majority of dental expenses, so seniors commonly put off checkups and necessary procedures much too long, and then suffer, later.

  7. In-home care

    A reverse mortgage can provide the funds to pay for services that allow seniors to remain in their home.  This can include help with cooking and light housekeeping, escorting to medical, shopping, and other appointments, as well as assistance with daily activities such as bathing and dressing.  This care can extend to live-in and 24-hour aides.  Avoid the temptation to save a few dollars by privately paying a worker “under the table.”  By dealing with only licensed companies, you don’t risk legal, tax, and liability issues.


  8. Long-term care insurance

    It’s estimated that one out of every two seniors will eventually need long-term care in a facility.  This kind of insurance will help pay for most or all of that expense.  But do a lot of shopping around.  There are big differences in costs and coverage between the various long-term care insurance companies.

  9. Other special things

Of course, it’s advisable to use money from the reverse mortgage wisely.  Most seniors are much better at controlling their spending than younger generations.  So it’s up to you to decide what’s important, what’s appropriate, and what’s frivolous.  Some people use a portion of the money to replace an old car, or pay for long-overdue home repairs.  Some take the opportunity to travel, while they’re still in good health.  Several seniors have purchased a small vacation cabin.  Others just want to improve the quality of their daily lives.  And some people use a portion of the money to donate to others who are less fortunate, or to causes that are important to them.