Just as a passenger on the Titanic might find the dining table they used the night before is now serving as a life raft many older homeowners may come to realize that their home is their ultimate saving grace.

With more stock market analysts warning of a stock market bubble investors could find themselves facing significant losses, reduced dividend income. Compounding the matter are the prices of daily goods and services that are 20-25% higher than they were just three years ago. Retirees will have to make some difficult decisions: either reduce their standard of living or find new sources of cash flow.

Similar to the Titanic passengers, few people consider tapping into their financial lifeboat until the ship starts to sink.

Financial lifeboats aren’t the most appealing investment. Most people hope that their current financial plan will carry them smoothly into a stress-free retirement. However, economic storms are a normal part of the economic cycle, and both the global and U.S. economies are on the verge of a tempest.

That’s why it’s imperative to not only discuss the homeowner’s current financial situation, but to also ask the ‘what ifs’. Would their cashflow be impacted if their stock portfolio lost significant value? If one spouse passes away would the surviving spouse be able to make ends meet should their pension payout or Social Security benefits be reduced?

The Reverse Mortgage Lifeboat

One successful individual I know secured his financial lifeboat long before any storm clouds appeared. He obtained a reverse mortgage three ago when interest rates were historically low and home values were at their peak. Instead of using his available line of credit right away, he invested his former mandatory mortgage payment into a voluntary retirement savings plan. 

Each month, he invests a significant amount that would have otherwise increased his home’s equity, which may diminish in the coming years. Whether the housing market crashes or his investments falter, he’s well-prepared and can reinvest rather than panic sell.

It’s still not too late for less affluent older homeowners to secure their passage through financial uncertainty. They can find immense relief from financial pressure by eliminating their required mortgage payment, even if their retirement savings are modest or inadequate.

A home is more than just a place to live and make memories. It can also serve as a vessel that helps thousands of older Americans avoid drowning in financial uncertainty and inflation.