The Traditional Retirement Model Is Shifting

For years, most retirement advice from major firms followed a familiar script: save early, invest wisely, and build a large enough portfolio to live off for the rest of your life. Your home, while important, was rarely part of the conversation beyond whether or not it was paid off.

But now, two of the biggest names in finance, Morgan Stanley and Charles Schwab, are publicly acknowledging something many retirees have long suspected: your home can play a much larger role in your retirement plan.

Morgan Stanley: Housing Wealth Can Improve Retirement Outcomes

In a recent video, Why Your Home Can Be a Retirement Asset, Morgan Stanley highlights a major flaw in traditional retirement planning: it sets the bar too high by assuming that all retirement income must come from savings and investments alone.

Their research shows:

• Retirees often spend less than expected, and not in a straight line
• Housing wealth is often overlooked, even when it makes up a significant portion of net worth
• Accessing that equity by selling or borrowing can dramatically improve retirement security

In short, they argue that retirees who consider using their home as part of the income equation may have more flexibility and peace of mind.

Charles Schwab: Reverse Mortgages Deserve a Second Look

Charles Schwab echoes a similar message in their online article Leveraging Your Home in Retirement. (Also available for direct Download)

They explore several ways retirees can unlock the value in their homes; including downsizing, home equity lines of credit, and reverse mortgages.

Importantly, Schwab:

• Highlights reverse mortgages as a viable tool, not just a last resort
• Explains that retirees can stay in their homes, retain ownership, and eliminate monthly mortgage payments
• Emphasizes the value of working with a financial advisor to determine what role home equity should play in a broader plan

Two Retirees Who Took a Second Look at Their Home

Pierce and Linda were in their early 70s with a paid-off $700,000 home. They had decent savings but were concerned about rising health care costs. By setting up a reverse mortgage line of credit, they gained a standby reserve of nearly $300,000 (accessible tax-free!) without touching their investments or selling their home. That line is now growing year over year and gives them real peace of mind.

Dave and Mary Ellen had a $650,000 home and a remaining $110,000 mortgage. The payments were draining their monthly cash flow. By replacing their traditional loan with a reverse mortgage, they eliminated their monthly mortgage payment, paused taxable IRA withdrawals, and gave their retirement savings a much-needed breather.

In both cases, the home wasn’t sold. It was simply repurposed as a stable and flexible part of the overall plan.

What This Means for Retirees and Advisors

This is a meaningful shift. When firms like Morgan Stanley and Schwab begin talking openly about the value of home equity and the tools available to use it, it signals a broader rethinking of what smart retirement planning looks like.

For millions of Americans heading into retirement, the message is clear: your house is more than where you live. It may be your most underutilized financial resource.

Ready to Learn More?

If you’re a financial advisor or a retiree wondering how housing wealth could fit into your planning conversations, I invite you to explore further:

• Watch the 7-minute masterclass introduction: www.FirstSevenMinutes.com
• Try the calculator: www.HousingWealthCalculator.com
• Speak with Don: www.AskDonGraves.net 

Let’s stop ignoring the largest asset many retirees own. The shift is already happening, and it’s changing lives.

Related Posts:

• 6 Ways Reverse Mortgages Can Manage Rising Insurance Costs
• Why Waiting to Secure a Reverse Mortgage Could be a Costly Mistake
• Can a Reverse Mortgage Happen When One Spouse is Under 62?

What to Do When You Have a Client or Case?

• Go to www.HousingWealthPro.com and request an Housing Wealth Illustration. Give Details in the “Notes” Section including the clients phone # if they would like a Housing Wealth Assessment. You can also
• Schedule a Time to Speak with Me: Click Here

The content of this blog is for financial advisors and professionals only and is not intended for consumer use. Names, cases, and scenarios are fictionalized for illustrative purposes. The opinions expressed here are those of the author alone and do not reflect the views of any affiliated entities or individuals. Don Graves, NMLS #142667.