A lot of discussion about “sequencing of distributions” has been taking place recently in financial planning circles. “Sequencing of Distributions” looks at the order in which you take distributions from your retirement account. This matters because the order in which you take distributions has a very significant impact on how long your retirement assets will last.
Consider the two examples illustrated in the chart. Column 1 has the same amount of distributions scheduled for the next five years, regardless of how the market performs. Column 2 changes the amount of distributions in years 2, 3 and 4, based on the performance of the market.
A reverse mortgage line of credit can be used to supplement your income in the years where you take a reduced distribution from your retirement account. This could preserve your assets for a longer period of time, and give you more flexibility as the market fluctuates.
Please see a financial advisor for more details on how to evaluate a better distribution sequencing strategy for your situation. Please contact me for more details on how a reverse mortgage could help.