摘要：A considerable literature examines the optimal decumulation of financial wealth in retirement.
We extend this line of research to incorporate housing, which comprises the majority of most
households’ non‐pension wealth.
We estimate the relationship between the returns on housing, stocks, and bonds, and simulate a
variety of decumulation strategies incorporating reverse mortgages. We show that
homeowner’s reversionary interest, the amount that can be borrowed through a reverse
mortgage, is a surprisingly risky asset. Under our baseline assumptions, we find that the
average household would be as much as 24 percent better off taking a reverse mortgage as a
lifetime income relative to what appears to be the most common strategy: delaying tapping
housing wealth until financial wealth is exhausted and then taking a line of credit. In addition,
the results show that housing wealth displaces bonds in optimal portfolios, making the low rate
of participation in the stock market even more of a puzzle.
