As the generation of Baby Boomers age the United States finds itself facing a retirement funds crisis more and more retirees lack the financial capacity to support themselves during their ever-increasing life spans. Financial advisors are working with these individuals to help them explore ways in which they can stretch their existing income and even find new sources of income to supplement their retirement funds.

Strategy: Home Equity Conversion Mortgage

One such strategy involves the federally-insured Home Equity Conversion Mortgage (HECM), a reverse mortgage program in which older homeowners can convert some or all of the equity in their homes into cash. Financial analysts see the HECM product as a well-designed program which allows seniors to draw funds in a variety of ways to meet their needs. The program was launched in 1989 but over the years it has remained small and a relatively small number of seniors have taken advantage of it. Major revisions in the program were initiated over the last 16 months and the HECM program now gives every indication that it is on the verge of significant expansion.