Tariff policy could inspire renewed talk of reverse mortgage as buffer asset'

Retirement experts warn that market volatility, particularly close to retirement, can jeopardize financial stability for older Americans. Wade Pfau, a financial services professor, emphasizes the importance of creating a resilient retirement plan to withstand economic turbulence. Suggested strategies include maintaining a cash reserve and exploring alternative income sources like annuities or reverse mortgages. Pfau notes that buffer assets, like reverse mortgages, can be tapped during market instability, allowing retirees to avoid withdrawing from portfolios in unfavorable conditions. These approaches aim to ensure better financial outcomes during unpredictable economic conditions.

What happens to the market and the economy in those near and early retirement years matters disproportionately to the success of your entire retirement plan.

Building a cushion of cash on a long-form retirement plan can be beneficial, particularly for those who saw their portfolios gain in their first year of saving.

Reverse mortgages could be seen as a buffer asset to tap temporarily until the market became more stable.

I'm personally finding the idea of a buffer asset even more compelling in terms of not having to plan for such a low withdrawal rate.

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