Homesafe Solutions managing director Peter Szabo said in a statement that the untapped wealth behind a family home has emerged as an unexpected final lifesaver to fund income savings gaps for retirees.
However, as a result of deep emotional attachments, the family home is often deliberately omitted from the mix in a total assets approach.
“With strong house price appreciation in recent years rendering the home a substantial asset for many senior Australians, the wealth tied up in the family home is too important an asset not to be included in a total asset approach to long-term financial sustainability,” Mr Szabo said.
“With so many seniors unprepared for retirement and uncertain about their future financial prospects, seniors need to broaden their horizons and consider options beyond superannuation, savings and the age pension.”
Mr Szabo cited a recent Actuaries Institute report that highlighted the conservative financial approach retirees have adopted in order to stretch their superannuation balances as far as possible.
However, while the report did much to highlight the problem and its causes, it did not provide answers and solutions for mature age Australians about to leave the workforce, nor for seniors in retirement, he said.
“Irrespective of how diligently and conservatively retirees manage their finances, the reality is that some are heading towards an outcome in which superannuation balances and savings nest eggs will run out long before death,” Mr Szabo said.
“As a result they will have no option but to either access the wealth tied up in the family home or government assistance via the age pension and related services for their remaining years.”
