The financial, emotional and health-related hardships many “poorly prepared” retirees experience could be alleviated by accessing the untapped equity in family homes, a wealth release specialist has argued.
According to Homesafe Wealth Release, rising health costs, rapidly depleting “nest eggs” and income sources that fail to keep pace with the economy’s inflation have left some seniors “going on to live lives of unnecessary hardship” and “struggl[ing] to keep their heads above the water financially”.
As such, the company has developed an offering that allows retiree homeowners to live in their own homes but sell a share of the future sale proceeds of their property for an immediate cash sum.
“These funds can then be used in a financial plan to retire debt, invest, augment superannuation, fund revenue streams etc. — whatever is most appropriate to underpin a dignified and financially secure investment,” said Homesafe managing director, Peter Szabo.
“As a result of deep emotional attachments to the family home and desire to leave a legacy for the kids, seniors and advisers deliberately omit the family home from the advice process,” he said.
“Accessing the equity in the family home and the life-changing potential it would provide continues to be intractably resisted with the process, safeguards and benefits misunderstood and unappreciated by seniors, adviser intermediaries and government,” he said.
To address the “elephant in the room”, Mr Szabo says financial advisers must first “understand how emotions impact this sector” as well as retirees’ “mindset to be independent, desire to stay in the family home and not be a burden on children and family members”.
“Each senior requires an individual solution and the issues are far too complex for answers to be derived online from a website filled with general information in the hope of formulating and executing an appropriate plan,” he said.
“Financial professionals are best placed to help seniors navigate these important and potentially confusing and stressful decisions by accessing the untapped equity in the family home to support their financial needs,” Mr Szabo concluded.