For Professionals
The bucket strategy, illustrated
A conceptual look at time-segmented planning and where a standby line of credit can sit. It shows which pocket funds each hypothetical year — nothing is projected, and no returns are shown.
For financial professionals
This interactive illustration is provided for financial-professional educational use and is not intended as consumer advice. If you're a homeowner, you're welcome to look — then please review the concept with your own financial advisor, and call Tanner Connelly with reverse mortgage questions.
A hypothetical 10-year window
Imagine a retiree who holds spending money in three time-segmented buckets. Set how many years of spending sit in the first two; the rest of the decade leans on the growth bucket.
Market scenario
Standby reverse mortgage line of credit
1 · Cash
2 years of spending
Today's spending. Certainty, not growth.
2 · Income
3 years of spending
Conservative income that refills bucket 1.
3 · Growth
5 years of spending
Long-horizon assets that need time.
1
down years covered by buckets 1–2
2
down years covered by the credit line
0
down years drawn from growth
Which pocket funds each year?
Simplified on purpose: real plans refill buckets continuously and harvest growth in up years. This strip isolates one question — in a down year, which pocket does spending come from?
In this hypothetical, the standby credit line covered years 6 and 7, so the growth bucket was never drawn on while markets were down.
Why professionals look at this
Research by retirement-income academics and practitioners has examined the standby HECM line of credit as a buffer asset: a source of spending in down markets so long-horizon assets aren't drawn on at depressed values. The unused portion of a HECM credit line also grows over time — growth in available borrowing capacity, not interest earned. Whether any of this fits a given client is a planning judgment that belongs to the client and their advisor; my role is the reverse mortgage side of the conversation.
Want to run a scenario for a client, or talk through how a LESA or tenure payment interacts with a plan? (720) 335-7100 · Tanner@EmpireHomeLoans.com
Important information
This is a conceptual, hypothetical illustration for financial-professional educational use. It does not depict any actual client, portfolio, market, or product, displays no investment returns, and is not a projection, forecast, or guarantee of any outcome. It is not investment, tax, or legal advice, and it is not a recommendation to buy, sell, hold, or liquidate any investment or to obtain any loan. Tanner Connelly is a licensed mortgage loan originator (NMLS 1998297, Colorado MLO License #100524814), not a registered investment adviser or financial planner; homeowners should consult their own financial, tax, and legal advisors about retirement-income strategy. Reverse mortgage line-of-credit growth is growth in available borrowing capacity, not interest or earnings. Product availability, program terms, and the amount of any credit line depend on the product, borrower age, home value, and current rates, and are subject to change without notice. A reverse mortgage is a loan secured by the home.
*The borrower must meet all loan obligations, including living in the property as the principal residence and paying property charges, including property taxes, fees, and hazard insurance. The borrower must maintain the home. If the borrower does not meet these loan obligations, then the loan will need to be repaid.
Reverse mortgage borrowers are required to obtain an eligibility certificate by receiving counseling sessions with a HUD-approved agency.