Summary: Reverse mortgages can be a viable alternative to downsizing when costs are considered. These products allow homeowners to tap into their home’s equity to fund their lifestyle, the opposite of an ordinary mortgage. Although the family home is currently exempt from means testing for the age pension, the Commission of Audit recommended home value be taken into consideration in future.
Key take-out: Eventually, Australians may have to accept that drawing down on home equity will become a necessity of retirement planning.
Key beneficiaries: SMSF trustees and superannuation accountholders. Category: Superannuation.