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  • Would another way to think of a RM as you selling the house, but the buyer pays you over time rather than as a lump sum? Commented Feb 25 at 16:15
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    Not really since you still own the house, but you continually borrow money against it as they pay you, and the interest gets accrued to the balance rather than you making payments. Commented Feb 25 at 16:38
  • Right. Normally buying over time is a service to the buyer (they can't afford the lump payment), and they pay interest for this service. RM is the opposite, because the "seller" wants to maintain their residence in the home. Commented Feb 25 at 16:38
  • As I've noted elsewhere, if mortgage rates are low enough, and your time horizon is long enough, borrowing money when buying a house rather than paying from savings can be a relatively safe form of leveraged investment. As the time horizon shortens, the risk increases. Unless the effective cost of the reverse mortgage is very low, taking more than is needed in order to invest is probably not a great idea at this point. (Even ignoring current state of the world.) One does want to try to get returns on middle - duration savings that will outpace inflation, but CDs etc. may suffice for that. Commented Feb 25 at 16:43
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    As someone mentioned in a comment, even if it were advisable to fund an IRA at her age, she wouldn't be able to do it -- you can only fund IRAs from wages, not investment income or loans. Commented Feb 25 at 23:27