There are several strategies you might wish to consider for improving your cash flow in retirement.

One is the reverse mortgage. Although retirees desiring more cash flow may be attracted by reverse mortgages, they should proceed with care. Consider these scenarios:

* Short stay. Suppose Dan takes out a reverse mortgage and has to move to a smaller place a year later. The loan repayment will be due so Dan will have paid substantial upfront costs for a modest amount of cash flow.

* Long stay. On the other hand, suppose Dan stays in the house for 20 years. The loan balance will keep compounding. When the house is ultimately sold to repay the debt, there may be very little equity left in the house.

Thus, a reverse mortgage might make sense if someone has a need for cash, a desire to keep living in the house, and other assets to leave to loved ones. The healthier you are—and the more likely to remain at home for several years—the more appealing a reverse mortgage might be.