Have you thought about a reverse mortgage?
With Australia fast becoming an ageing nation, more and more Aussies are grappling with the anxiety that comes with retirement.
While in theory retirement should be a time to be celebrated after years of hard work and providing, the reality is something entirely different.
With the constantly increasing cost of living nowadays, the thought of retirement for many comes with the fear of financial insecurity. Have I put away enough money to live comfortably into my twilight years?
For those members approaching retirement age a recent article in the Australian Financial Review titled “The Best Ways to Tap into Home Equity to Fund Retirement” makes for both a timely and helpful read.
The article, written by Richard Wakelin and published on June 28, asks the topical question of how retirees plan to fund the early years of their retirement without tapping into their superannuation nest egg for the later years?
The answer that all baby boomers want to hear?
Well… it’s not that simple, of course. However, the story suggests that taking out a “reverse mortgage” is one genuine option well worth looking into if that option is available to you.
So what is a reverse mortgage and how does it work?
A reverse mortgage is essentially a loan taken out against the equity in your home. To qualify a borrower must generally be over 60 years old and the loan can be a lump, monthly or line of credit.
What’s more, the loan is usually repaid when you choose to sell your home yourself, or when the last surviving borrower passes away often making it an attractive alternative for older homeowners.
It is important to note that this is a complicated area and given everyone's circumstances are different it is important to seek financial advice.
To learn more about reverse mortgages you can read the entire article here: Australian Financial Review - Best ways to tap into home equity to fund retirement
Any advice contained in this article is general in nature and does not take account of your individual circumstances, objectives or needs.