In Australia, the aged pension is a vital safety net for retirees, providing financial support to those who have contributed to society throughout their lives.

On 20 March 2024,  the maximum full Age Pension increased $19.60 per fortnight for a single person to $1,116.30 per fortnight (approximately $29,028 per year), and $14.70 per person per fortnight for a couple to $1,682.80 per fortnight (combined, approximately $43,753 per year).

Although the indexed increases are welcome, the reality remains that it’s still not enough to afford a comfortable retirement, leaving many retirees struggling to make ends meet during their golden years.

The quest for comfortable retirement

Living a comfortable retirement entails more than just covering basic needs; it involves maintaining a reasonable standard of living, enjoying leisure activities, and having the financial freedom to meet unexpected expenses. Unfortunately, for many pensioners, this remains an elusive dream. Despite working hard and contributing to society throughout their lives, they find themselves grappling with financial stress in their later years.

According to the latest ASFA retirement standard, as of 31 December 2023, for those aged 65-84 a single person would require approximately $32,665 to live a modest lifestyle, and $51,278 to live a comfortable lifestyle, while couples (combined) would require approximately $46,994 to live a modest lifestyle and $72,148 to live a comfortable lifestyle.

For those living on the pension alone, these figures show that many can’t even afford to live a modest lifestyle, let alone a comfortable one – unless they have a total income which exceeds the Age Pension.

The role of reverse mortgages

If you can’t sustain a comfortable lifestyle on the pension alone, or through superannuation or other assets if held, what options do you have?

Reverse mortgages are becoming a popular solution for homeowners as it allows you to release the equity in your home to fund your lifestyle, while continuing to own and live in your home for as long as you choose.

Unlike traditional mortgages, reverse mortgages are designed for retirees and do not require regular monthly loan repayments. Instead, the total loan including interest is due when the last nominated borrower leaves the property, most commonly when the house is sold, they move into aged care or pass away. What’s more, you can make voluntary partial repayments if you choose to at any time!

Find out more about the different product options Heartland offers here.

Ready to apply? You can Apply Online, or request an Application Pack that provides everything you need to apply.

If you require any assistance, feel free to get in touch, we are here to help you.

Information provided is accurate as of 11 April 2024 and may change from time to time.