MEDIA RELEASE – 11 November 2016

One of the strategies a senior homeowner should consider when reviewing their financial position in retirement, is the ability to eliminate debt and its associated servicing costs, said Homesafe Managing Director, Peter Szabo.  Unfortunately, there is an increasing number of retirees leaving the workforce with home loans, credit card debt or personal loans, often with increasing balances as interest charges continue to accrue.

Commenting further Peter Szabo said that without considering alternative options, the likelihood of achieving a stress free financially secure retirement is becoming less achievable for many retirees. 

“Servicing debt in retirement on top of normal living expenses is a significant issue for retirees.  It is compounded further for those with insufficient savings trying to make ends meet from low investment yields and rising living expenses including those associated with medical costs and lifestyle changes”.

For a homeowner retiree in this situation, the task of eliminating debt without needing to sell the family home may appear to be insurmountable, particularly if they are unaware that there may be solutions available to them to reduce the burden of their loan commitments. 

The inability to pay off debt in retirement is a major threat to a retiree’s financial security affirmed Peter Szabo.  “In retirement, income is normally reduced to a fixed level derived from various sources including the Age Pension, superannuation or savings and investments that may have accrued over the years.

“Whilst in paid employment, debt may well have been manageable. However on a fixed income, rapidly reducing savings, the scenario can be quite stressful.  Hence, it is important to consider eliminating, consolidating or reducing debt, whether preparing for retirement or if already retired”.

Retirees would be well advised to first obtain professional advice from their financial planner or accountant given the ramifications of the decisions they make could potentially jeopardise long-term financial security.

For homeowners about to or who have already retired, there are strategies available that can assist and may ultimately mean the difference between a secure retirement and one under the shadow of debt.

Peter Szabo concluded, “A viable option is to access part of the wealth stored in the home, to repay debt.  Homesafe Wealth Release is a debt free product which facilitates the sale of a share of the future sales proceeds of the home, in turn for an upfront payment. 

“Using Homesafe Wealth Release, senior homeowners retain the right to live in the home for the rest of their lives, with Homesafe receiving its share of the sales proceeds upon the eventual sale of the home. We continue to assist many senior homeowners at this crucial time in their retirement planning”.