More ill-prepared retirees set to sell down homes
More pre-retirees are set to sell down assets like their houses in preparation for retirement, possibly leading to volatile property prices that will only further prolong retirement, according to Wealth Within chief analyst Dale Gillham (pictured).
“All indications are that at some point over the next two to five years property assets will be sold down to clear debt for retirement, as many retirees will not be self-funding and the pension is insufficient to maintain the lifestyle they are used to,” Gillham stated in his regular market report.
He said this was likely to lead to increasing volatility in property prices, which may have an adverse impact on those looking to retire.
This picture is a very different one from the traditional situation for retirees in the last few decades, who tended to pay off their mortgage as quickly as possible in readiness for retirement.
“Times have changed and statistics now indicate around 30 per cent are still holding significant levels of debt in the years immediately before retirement,” said Gillham, pointing blame at easy access to credit and marketing hype that encouraged people to borrow for bigger homes, new cars, holidays and investments.
AUTHOR
Caroline Munro
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