You Can Get a Bigger Social Security Check. Home Equity Can Help You Wait for It.

Here's a question I hear from homeowners in Lakeway and Westlake all the time: "Austen, I know I should wait to claim Social Security, but I don't know how I'll cover expenses in the meantime." That tension is real. And for homeowners 62 and older who have significant equity, there's a strategy worth understanding: using a HECM line of credit as a bridge while you delay your Social Security claim.

This isn't a pitch for reverse mortgages. It's an explanation of how two separate tools, used together, can strengthen a retirement income plan. Run this by your financial advisor or CPA before making any moves.

What the Social Security Delay Actually Does for You

Every year you delay claiming Social Security past your full retirement age, your benefit grows by roughly 8%. That's a guaranteed, inflation-adjusted increase that lasts for the rest of your life. If your full retirement age is 67 and you wait until 70, your monthly check could be 24% larger than if you claimed right at 67, and substantially larger than if you claimed at 62.

For a couple in their 60s, that difference over a 20-plus year retirement can be significant. The math usually favors waiting. The problem is cash flow.

What a HECM Line of Credit Actually Is

A HECM (Home Equity Conversion Mortgage) is an FHA-insured reverse mortgage. The line-of-credit option lets an eligible homeowner 62 or older open a credit line against their home equity and draw from it on their own schedule. No required monthly principal-and-interest payment. The balance grows if you carry it, and here's the part most people don't know: the unused portion of the credit line grows over time at the same rate as the loan's interest rate plus the mortgage insurance premium.

That growth feature is what makes the HECM line of credit different from a standard HELOC. A HELOC can be frozen or reduced by the lender if your home value drops or your income changes. The HECM line of credit, once established, cannot be reduced or frozen as long as you meet the basic obligations: live in the home as your primary residence, keep up with property taxes, insurance, and basic maintenance.

The Bridge Strategy in Plain English

Here's how the pieces fit together:

  1. A homeowner in Travis or Williamson County, say 63 years old, owns a home free and clear or with a small remaining mortgage balance.
  2. They want to delay Social Security until 70 to lock in the highest possible benefit.
  3. Instead of pulling from their investment portfolio during those seven years (especially dangerous in a down market), they open a HECM line of credit.
  4. They draw from that line to cover living expenses, bridge gaps, or replace income they would have taken from investments.
  5. At 70, Social Security kicks in at the higher amount. They stop drawing on the HECM, or draw much less.

The loan balance on the HECM gets repaid when the home is eventually sold. Any remaining equity belongs to the heirs.

Why This Matters for Sequence-of-Returns Risk

Sequence of returns is the risk that a bad market early in retirement does lasting damage to your portfolio. Selling investments at a loss to fund daily expenses is what turns a temporary market drop into a permanent problem.

A HECM line of credit gives you a source of funds that isn't correlated to the stock market. It doesn't go down when your portfolio does.

For a homeowner in Cedar Park or Round Rock sitting on $400,000 to $600,000 in equity, that's a real buffer. You let your portfolio recover while you draw on home equity, then shift back once markets stabilize or Social Security income is flowing.

What to Watch Out For

This strategy isn't right for everyone. A few honest cautions:

  • Health matters. If your life expectancy is shorter, delaying Social Security may not pay off. A financial planner can model your break-even point.
  • You have to stay in the home. A HECM requires the home to be your primary residence. If you plan to move within a few years, this gets more complicated.
  • HECM fees are real. Upfront costs include an FHA mortgage insurance premium, origination fee, and closing costs. You need enough equity for it to make sense.
  • Heirs need to know. The loan balance grows over time. Adult children should understand that the home will carry a debt that gets repaid at sale. I'll cover the heir conversation in a future post.

Have This Conversation with a Team

A HECM line of credit is a financial planning tool, not just a mortgage product. It works best when a loan officer, a financial advisor, and sometimes a CPA are all looking at the same picture. If you're in the Austin metro, home values in Travis, Hays, and Williamson counties have created real equity positions that make this strategy viable for a lot of households.

Want to walk through your numbers? Talk to Austen.

Austen Smith, NMLS #265697. Barton Creek Lending Group, NMLS #264320. This post is educational and does not constitute financial or tax advice. HECM borrowers must meet FHA eligibility requirements.