Asset-rich, cash-poor Australians
can use the equity in their properties as a way of topping up any shortfalls in
retirement, industry experts have said.
According to Household Capital, 439,000 Australians
intent to retire within the next eight months, despite the average savings
being below the recommended levels.
Australia’s median household superannuation balance at retirement being
approximately $200,000 and the median value of homeownership at retirement is
$700,000, retirees can draw on the $700,000 in equity to fund their future
Capital chief executive Joshua Funder believes that innovative changes, such as
the use of equity in property can help retirees bridge the gap between what
they currently have inequity and what they will need to fund their retirement.
the average age of Australia’s population continues to increase, so does the
need for innovative funding solutions to support this demographic shift,” said
does it work?
reverse mortgage allows the retiree to borrow money using the equity in their
home as security. Interest is charged like any other loan, but they don’t need
to make repayments while you live in the home. The loan must be repaid in full
if the retirees sell the property or passes away.
Capital believes the drawdown facility has been developed due to strong demand
from financial advisers who are looking to help retirees fund their futures.
are various expenses which can arise in retirement, so we have developed a
flexible funding solution which can be tailored for these individual
requirements whatever they may be,” Mr. Funder added.
Household Loan is designed to meet the needs of Australian retirees by allowing
them to balance their savings, continue to grow their assets during retirement,
and harvest a sustainable income from their investments,” Mr Funder concluded.
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Tuesday, 5 January 2021