This study explore the effect of reverse annuity mortgage whether it improves the income level of the elderly households. Using KLIPS(4th - 11st, 2001 - 2008), we analyze the hypothetical situation that the applicable elderly households applies for the current reverse mortgage annuity provided by Korean Housing and Finance Corporation(KHFC). We hypothesize that the current reverse annuity mortgage does have a positive effect on the income level for the elderly households through allowing wealth effect and mitigating their financial hardship.