One such source is your home. One approach for retirees traditionally has been selling their homes and moving into a smaller home, then pocketing the difference. However, a slow housing market has hurt the ability of many seniors to tap their home equity in this manner.

An alternative is reverse mortgages. They allow homeowners to tap home equity even if they can’t sell their home. With a reverse mortgage, a homeowner (usually 62 or older) borrows against the equity in the home and receives regular payments. Those payments are tax-free, just as the proceeds from any type of loan are not subject to income tax.

Although a reverse mortgage is a loan, you are not required to repay anything until you sell or vacate the home. You must remain current on your tax and insurance payments, though. When a reverse mortgage borrower sells the house or dies, the lender will be repaid, plus interest. Typically, repayment will come from the sales proceeds.

Reverse mortgages have upfront costs, paid by the borrower. Therefore, borrowers should intend to stay in the house for a while, after getting a reverse mortgage, to justify paying the initial charges.

Another potential source of cash is a life insurance policy you no longer need. Perhaps your kids are finished with school and living independently. You might not want to keep paying steep premiums every year.

One possibility is to surrender your policy. If it has cash value, you may wind up with some money. Another option is to sell your policy. This type of transaction is called a life settlement. Institutional investors buy pools of such policies and keep paying the premiums while awaiting a payoff.

In some situations, you might get more from a sale than from a policy surrender:

* You must have a severe health condition. Investors often buy from elderly individuals so a sale might work for your parents.

* You must have the right kind of insurance policy. Buyers prefer universal life policies because they permit reductions in premium payments. Term life policies that can be converted to universal life also may be sought by buyers.