This is illustrated in Chart 3, on which the top line is spendable funds as restored by the HECM backup credit line, and the lower line shows the required draws from the HECM credit line. In the case illustrated, the HECM credit line is more than sufficient to fund the deficit. In the event that actual asset returns exceed the median return used in the retirement plan, both financial assets and the HECM credit line will grow. A retirement plan to accommodate them should provide a payment jump when partial retirement becomes full retirement. During the partial retirement period, the retiree would draw smaller amounts against a HECM credit line.

Source: Forbes December 28, 2020 10:52 UTC