Key Points
Report calls for a rethink on the home from a "nest egg" to a key financial asset to boost retirement income.
It also wants the family home to be included in the Age Pension means test.
National Seniors opposes this and says a universal pension would better support retirees.
Could the family home be the "secret" to making housing more available for families while fuelling a wealthier retirement for struggling retirees?
That's the essence of a dialogue paper by the Actuaries Institute - More Than Just a Roof: Changing the Narrative on the Role of the Home - which calls for a rethink on how the home is traditionally viewed, changing from a "nest egg" to a key financial asset retirees can use as an income stream in retirement.
Downsizing or reverse mortgaging the family home as a source of income for asset rich but cash poor retirees is not a new idea. However, this report goes further by asserting retirees have too much money tied up in housing and governments should encourage them to divest through carrot-and-stick policies, including means testing.
The paper says more than 80% of Australians aged 65 to 74 live in their own home, with retirees holding an estimated $1.3 trillion worth of housing equity. However, many do not view their home as a financial asset that could be more actively managed beyond potentially helping to pay for future aged care costs and as a bequest.
"If retirees accessed 20% of the $1.3 trillion they hold in home equity, it would unlock about $260 billion to help fund what could be 25 to 30 years or more in retirement," paper author and actuary Andrew Boal said.
Most recommendations are aligned with National Seniors' long-standing advocacy for practical policy measures to enable seniors to downsize, without affecting Age Pension payments.
