When I talk with people who want to review their retirement plans, we go through their assets one by one, including Social Security, 401(k), and their home. A common question that arises during this process is whether there are ways to generate more cash flow by utilizing their home.

Let's take a look at the Macon housing market. According to Zillow, the average home value is $154,426, which has increased by 9.7 percent over the past year. According to the Riverside Line, the median sales price as of August is $185,000, and the recent sales price according to Redfin is $195,000, which is a 24.6 percent increase from a year ago. While the entry price is still relatively low compared to other cities in Georgia, retirees who have lived there for a long time likely have built up a significant equity.

Before including a reverse mortgage in retirement planning, there are five key items to check in order:

• Age and residency requirements - You must be at least 62 years old and the home must be your primary residence.
• Existing loan balance - The remaining balance on existing loans must be at a level that can be paid off with the reverse mortgage loan.
• Financial capacity assessment - You must pass an assessment to ensure you can continue to pay property taxes and insurance.
• Initial costs - You need to be able to handle higher initial costs, such as origination fees and mortgage insurance premiums, compared to a standard mortgage.
• HUD-approved counseling - You must schedule mandatory counseling before applying.

Regarding the financial capacity assessment and property taxes, the median effective property tax rate in Bibb County, where Macon is located, is 1.02 percent, which is similar to Georgia's median of 1.00 percent. The county millage rate for 2025 is 9.575 mills, which has decreased for five consecutive years. However, actual tax bills may vary depending on the school district, so it's advisable to check by address.

Incorporating a reverse mortgage into retirement planning comes with both benefits and trade-offs. You can secure funds for living expenses or medical costs without monthly principal and interest payments, and since HECM is a non-recourse loan, heirs are not required to pay the difference if the home value falls below the loan balance. On the other hand, the equity left in the home decreases over time, which means there will be less to pass on to children, and if property taxes or insurance cannot be paid, it could lead to default, which is an important consideration in overall retirement planning.

Retirement planning is not completed with just one product. You need to look at the cash flow generated by a reverse mortgage alongside Social Security and 401(k) withdrawal plans to see the big picture. For example, when deciding how much to withdraw from a 401(k) each month, considering the cash flow secured through a reverse mortgage can allow for a slower withdrawal rate, reducing tax burdens. Conversely, if the initial costs of a reverse mortgage are a concern, you might consider increasing 401(k) withdrawals first and utilizing the home later. The right approach varies by household, so it's wise to review the entire flow with a tax advisor or financial expert when determining the order. In areas like Macon, where living expenses are not overly burdensome, some choose to keep a line of credit open as a reserve rather than rushing to use a reverse mortgage.

As of 2024, 15.8 percent of Georgia's population is over 65, and even in smaller cities like Macon, I frequently meet people looking to reassess their retirement plans. By reviewing the five key items and completing HUD-approved counseling, it becomes much clearer whether this product truly fits into one's retirement plan. A reverse mortgage requires mandatory counseling from a HUD-approved agency before applying, and there have been reports of scams targeting the elderly, so it's important to take your time and discuss thoroughly with family. This article is not investment or legal advice, and I recommend consulting with a professional before entering into any contracts.