Seniors should boost cash by selling home
Senior homeowners should boost their cash reserves by selling their homes while prices are high, according to Aged Care Gurus.
The financial advice firm said many asset-rich cash-poor seniors were missing out on the opportunity to build on their existing home equity and improve their living standards.
Aged Care Gurus principal, Rachel Lane, said senior homeowners could boost their cash reserves by tens or hundreds or thousands of dollars by selling while prices are high and moving into more affordable accommodation.
"While housing affordability is generally considered a young person's issue restricting entry to the market, it is also a major problem for those that do own a home but rely on a low weekly income," Lane said.
Lane noted the Government's productivity commission's housing report found more than 90 per cent homeowner Age Pension recipients currently under the Association of Superannuation Funds of Australia's threshold for modest retirement standards could reach that benchmark over the rest of their lives by using their home equity.
"The report also suggested households aged 65 to 74 years had on average $480,000 in home equity, which compared to the cost of a more affordable home in the vicinity of $200,000 to $300,000 represents a significant gap of potential cash reserve," Lane said.
"Senior homeowners looking to downsize needn't be competing in the private market against homeowners and investors, which is a common fear, as there are a variety of traditional and new home options to suit."
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