Rethinking home equity and retirement funding

Insights / March 22, 2019

 

 

Australians are experiencing a major societal transformation as the baby boomers, around 5.5 million people born between 1946 and 1964, are reaching retirement. While they are living longer than ever, it presents a conundrum – many of this cohort simply don’t have sufficient superannuation to fund a comfortable retirement for their projected lifespan.

 

Traditionally, Australia’s retirement income policy has been framed as having three pillars: superannuation, non-superannuation savings and the age pension. It is time to include the fourth, and largest, pillar of retirement funding: home equity.

 

By drawing on multiple sources of income, Australian retirees can achieve funding adequacy throughout the full course of 25-plus years of retirement. To do this, however, retirees must be able to responsibly and cost-effectively access home equity savings to generate retirement income.

 

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