RFI User Guide - HECM Tenure Payments


RFI - HECM Tenure Payments


The HECM Tenure Payment provides a fixed monthly payment to the retiree for as long they are living in their home. You can select the tenure payment option for one or more scenarios in RFI by selecting "Tenure Payment" in the dropdown list as shown below:


To illustrate the behavior of the tenure payment we will define two similar scenarios; both include monthly draws from financial assets but one includes a HECM tenure payment and the other does not.  In both cases the "Assumed Rate of Return" is set to the 30th percentile historical return, and the "Rate that Materializes" is set to the 5th percentile historical rate of return.

When the scenarios are calculated the spendable funds chart is displayed as follows:

There are a few things to note about this chart:

As with all RFI scenarios, you can also view projected asset values and net value of the retiree's estate on the second RFI chart, as illustrated below:

The pop-up blue box shows a number of noteworthy details about the scenario:

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