Over recent decades, the value of the typical family home has increased significantly. However, so has the cost of living – especially for retirees. Being asset rich and income poor is not an unusual predicament among Australia’s retired population. A single person, or couple, living on the age pension alone, are unlikely to be able to meet even a moderate lifestyle in retirement.

W2 Wealth can help you understand the options available to use the equity in your home to help fund your retirement. However, many of these strategies are complex and obtaining documented and professionally researched advice is paramount.

Steps to accessing equity in your home

1. Evaluate your current situation

The first step is to assess your current financial situation. Where are you now? What is your current income, your current assets, and liabilities? What lifestyle would you like in retirement? Are there other reasons for accessing the equity in your home – renovations, travel, helping family members? Each situation is slightly different, but in summary you need to consider your future needs.

2. Understand the different options available to you?

here are many ways to access the equity in your home. Strategies may include renting part of your home, taking out a reverse mortgage*, accessing the Government’s ‘Home Equity Access Scheme’ or simply downsizing your home.

Planning of this nature can seem daunting or even be stressful and emotional. However, W2 Wealth can help you evaluate the options available to you and outline the benefits, costs, and risks of each one. You will require personalised advice specific to your situation. It is important to complete this step correctly as whichever strategy you choose may impact other things, such as longer-term taxation or the amount of Age Pension that you may receive.

To facilitate a reverse mortgage, you will need to receive credit advice. W2 Wealth does not provide this type of advice. However, we can work with you and an accredited mortgage broker.

3. Implementing the most appropriate strategy.

Once you have decided on the best strategy for your situation, it will need to be implemented. W2 Wealth can help you do this. Again, it is important that the strategy is implemented in a proper and timely manner to ensure that no negative or unforeseen consequences are triggered.

4. Living the retirement lifestyle, you want.

Once your strategy has been implemented you can then live the retirement lifestyle that you wish.

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