What If Your Home Could Buy You a Bigger Social Security Check?

A lot of homeowners in Westlake, Lakeway, and Cedar Park have done everything right. They paid down the mortgage. They saved. And now they're sitting on $600,000 or $800,000 in home equity while wrestling with one of the most consequential decisions in retirement: when to turn on Social Security.

Every year you wait past 62, your benefit grows. Wait until 70 and you collect roughly 76% more per month than if you had claimed at 62. That difference, compounded over a 20- or 30-year retirement, is not a rounding error. It's potentially hundreds of thousands of dollars in lifetime income.

The problem is the gap. If you retire at 63 or 65 but want to wait until 70 to claim, you need something to live on in the meantime. Most people either claim early (and lock in a permanently reduced benefit) or draw down their investment portfolio in the early years of retirement, which creates its own set of risks.

A HECM line of credit is one tool that can bridge that gap. Here is how the strategy actually works.

What a HECM Line of Credit Actually Is

A HECM (Home Equity Conversion Mortgage) is a federally insured reverse mortgage backed by FHA. The line-of-credit version lets you borrow against your home equity as needed, not as a lump sum. You don't make monthly mortgage payments. The balance grows over time and is repaid when you sell, move out, or pass away.

Here's the feature that makes this strategy interesting: the unused portion of a HECM line of credit grows at the same rate as the loan's interest rate. If rates are at 6.5%, your available credit grows at roughly that rate. That means the longer you leave it untouched, the more you can access later.

The Bridge Strategy, Step by Step

Let's say Maria is 65, owns a home in Round Rock valued at $650,000, and has a small remaining mortgage. She wants to delay Social Security until 70 but needs $3,000 to $4,000 a month to cover living expenses during those five years.

Here is what the strategy can look like:

  1. Maria pays off her existing mortgage at closing using HECM proceeds (required if there's a lien).
  2. She opens the remaining equity as a HECM line of credit.
  3. Over five years, she draws from that line instead of selling investments or claiming Social Security early.
  4. At 70, she turns on her Social Security benefit at the maximum rate.
  5. Her monthly Social Security income now covers most of her living expenses, and she draws less from the line going forward.

The line is still there as a reserve. She still owns the home. Her heirs still inherit any remaining equity after the loan is repaid.

Why This Isn't Just for People Who Are Broke

The homeowners who benefit most from this strategy often have substantial assets. They're using the HECM to protect those assets, not because they have nothing else.

Drawing from home equity in the early years of retirement can preserve your investment portfolio through the critical sequence-of-returns window. If the market drops 25% in year two of retirement and you've been selling shares to live, those shares are gone and can't recover. If instead you drew from the HECM line that year, your portfolio gets time to come back.

This is called a coordinated withdrawal strategy, and fee-only financial planners in Travis and Williamson counties are increasingly including it in retirement income plans alongside 401(k) distributions and Roth conversions.

What You Need to Qualify

To open a HECM line of credit, you generally need to:

  • Be 62 or older (one spouse on title must meet this age)
  • Own the home as a primary residence
  • Have sufficient equity (FHA sets lending limits; in 2026 the national HECM limit is $1,209,750)
  • Complete a HUD-approved counseling session before closing
  • Keep paying property taxes, insurance, and HOA dues

The counseling session is not a formality. It is genuinely educational and required by law. I'd encourage anyone considering this to take it seriously.

The Conversation to Have Before You Apply

This strategy works best when your financial advisor, CPA, and a reverse mortgage specialist are all looking at the same picture. The HECM is one tool in a toolkit. It is not right for everyone. If you plan to sell and downsize in two years, the closing costs likely don't pencil out. If you have limited equity or the home needs significant repairs, that changes the math too.

But for a homeowner in their mid-60s with meaningful equity and a desire to maximize lifetime income, the HECM line of credit plus Social Security delay is one of the most underused retirement strategies I've seen in 21 years of lending.

Want to walk through your numbers? Talk to Austen.

Austen Smith, NMLS #265697. Barton Creek Lending Group, NMLS #264320. This post is educational and not an offer to lend or a guarantee of approval.