Use a Reverse Mortgage to Supplement Your Retirement Portfolio
And greatly increase the chance of meeting your spending goals.
To download the Ibis 'white paper' that provides the background for these calculations, click
JFP December 2013
Copyright © 1994–2016 Ibis Software Corporation. All rights reserved. Patents pending 61/727,623 and 13/830,725.
For a quick start, click
If you're comfortable, click
Borrower Birth Date
The youngest borrower must be at least 62 on the reverse mortgage loan's closing date.
Co-Borrower Birth Date
Reverse Mortgage Closing Date
Say 60 days from today
Gender (for Mortality Engine)
1 = Female, 2 = Male
Health (for Mortality Engine)
1 = Excellent, 2 = Average
Just 5 digits, not zip + 4
Best estimate of what a current appraisal would be.
The new reverse mortgage must be the only lien against the home.
Liens being paid off that are attributable to home acquisition and/or home improvement debt can likely be carried forward when considering what portion of the reverse mortgage accrued interest may be deductible in the future.
No longer making mortgage payments is a benefit to be considered in your retirement planning. An estimate of the deductible portion, for example, 50%, will allow calculation of the tax-equivalent monthly savings.
Total Liens to be Paid Off
Lien against the home.
Home Acquisition or Improvement
Dollar amount of Total to be carried forward for future calculations.
Monthly Lien Payments
No more payments increases retirement spending.
Current Liens % Deductible
Interest Portion of Current Mortgage Payments.
How many months to go?
Benefits from retiring the lien will be carried that far into the future.
Current Market Value
Portfolio Cost Basis
Current Cost Basis in Dollars
Portfolio Yield (%)
Dividends and Interest Taxed as Ordinary Income
Marginal Tax Rate
Combined Federal and State Tax on Ordinary Income
Capital Gains Tax Rate
Combined Federal and State Tax on Long-term Gains
Reverse Mortgage Inputs
Desired Upfront Cash
Upfront Cash can be used as you wish, and the Creditline can be a reserve, but any money not allocated to monthly advances will lower the 'spending success' results of the model.
HECM Product Info
Choose a Loan Program
The HECM Choice requires a 60% upfront draw so may not be the best for long-term retirement spending.
Lender's Origination Fee
No Loan Fee
Suggest three or more lenders; clients seek their own best deal.
Monthly Service Fee
Seldom used now, but will likely return at $30 or $35 per month.
Desired Portfolio Draw Rate
For example, 6.0% in the first year
Retirement Spending Years likely 30 or more
Interim Year to Inspect
15 years out is a good starting point
Monte Carlo Inputs
Enter arithmetic averages, not geometric returns, the software does all of the appropriate transformations.
2,000 Monte Carlo iterations thru thousands of calculations over forty years takes less than 5 seconds.
You can request versions with fewer iterations to quickly compare alternatives, then make a Full Run on the final scenarios.
To see results from 2,000 iterations, click >>
Call Jerry Wagner at Ibis. 510-217-8775
Copyright © 1992–2016
Ibis Software Corporation
All rights reserved. Patents pending.