Retirement Answer Man Retirement Talk with Dr. Wade Pfau
7 snips
Mar 18, 2026 Wade Pfau, retirement researcher and author of The Retirement Planning Guidebook, explains the RISA assessment and why it outperforms typical risk questionnaires. He explores real estate and reverse mortgages as retirement tools. He digs into annuities — timing, inflation protection, and fixed index products — and untangles tax timing, ACA subsidy cliffs, and how software models retirement outcomes.
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Reverse Mortgages Are Underused Despite Theoretical Value
- Reverse mortgages remain rarely used (≈1–2% of eligible homeowners) despite offering a liquidity line that grows and can't be canceled.
- Upfront costs and homeowners' aversion to taking 'another mortgage' explain low adoption more than technical effectiveness.
Account For High Upfront Reverse Mortgage Costs
- Don't ignore reverse mortgage setup costs: a 2% mortgage insurance premium can make closing costs $20k–$25k and creates significant sticker shock.
- Factor those upfront fees when evaluating HECM as a sequencing or liquidity tool.
Effective Marginal Tax Rate Is Multi‑Layered
- Effective marginal tax rate (EMR) equals how much tax you pay on the next dollar and includes interactions like Social Security taxation, capital gains stacking, SALT phaseouts, and IRMA surcharges.
- EMR drives whether Roth conversions make sense; simple bracket-filling misses these phase-in/phase-out effects.
