Baby boomers have to help themselves
With the 2008 Federal Budget failing to increase the age pension, the uptake of reverse mortgages is expected to soar as thousands of baby boomers struggle to fund their retirement lifestyles, according to the Senior Australians Equity Release Association of Lenders (SEQUAL).
The association’s head of education, Kevin Conlon, estimates that from now through to 2031, more than 200,000 Australians will celebrate their 60th birthday, with 65 per cent relying on the age pension as their primary source of income when they retire.
“The baby boomers are the largest generation and are poorly prepared for retirement,” Conlon said.
“The Government sent a clear message in the Budget that if the baby boomers want to live well in retirement, they are going to have to help themselves.”
With at least 60 per cent of retirees’ wealth held in property assets, Conlon believes most retirees will need to tap into the equity of the family home in order to fund retirement.
While Conlon said he was delighted Australia’s reverse mortgage market offered an alternative to retirees, he admitted many families would need to confront the traditional notion of the family home.
“There is a real message to the boomer generation — it is not going to be the age pension that will save them.”
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