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Are increasing costs putting a strain on your budget?

12 August 2021

Heartland is pleased to have helped over 22,000 customers live a more comfortable retirement with our reverse mortgage.

Some of our existing and new customers have told us how challenging it is to live a comfortable retirement on the pension alone. This is despite many people having considerable equity in their home.

Australian Super is not enough

The current maximum basic pension rate is $952.70 (approximately $24,770.20 per year) for a single and $1,436.20 (approximately $37,341.20 per year) for a couple combined per fortnight.

According to December 2020 quarter figures from the Association of Superannuation Funds of Australia (ASFA), for those aged around 65:

  • A single person requires approximately $28,179 per year to live a modest lifestyle, or $44,224 to live a comfortable lifestyle.
  • A couple would require approximately $40,739 to live a modest lifestyle, or $62,562 to live a comfortable lifestyle.

What is the difference in living on the Age Pension alone, a modest lifestyle and a comfortable lifestyle? ASFA breaks down what this could look like:

Table source: https://www.superannuation.asn.au/ArticleDocuments/269/ASFA-RetirementStandard-Summary-2018.pdf.aspx?Embed=Y

As you can see, the pension alone does not provide enough funds to cover a modest lifestyle, let alone a comfortable one. These figures also assume that you own your home outright, so if you retire with any debt or mortgage repayments these will take a significant portion out of this retirement income.

Many people dream of their retirement years, ticking off those bucket list adventures, visiting family and friends, doing home renovations and much more, so the last thing they want to do is tighten the belt just to be able to afford the basics. However, it is a sad fact that many do need to.

There is a solution

A Heartland Reverse Mortgage allows retirees to release the equity in their home to fund a more comfortable retirement. Heartland recognises that everyone’s needs in retirement are different, so we have flexible drawdown options that can be tailored to suit your individual retirement needs. One of these options is our regular advance.

Heartland’s regular advance option is a payment to supplement your retirement income (such as the pension or personal savings). It can be accessed as a monthly, quarterly, or annual payment for up to 10 years.

This income supplement could help take the stress out of everyday bills, so you can have peace of mind that you have covered your necessary bills, while also having a little extra to splash out on things that make your retirement more comfortable and enjoyable. This could include going out for dinner, having higher quality groceries, running the air conditioning or heating more frequently, having faster internet and much more!

To find out more about a Heartland Reverse Mortgage and our regular advance option, please get in touch with our customer care team on 1300 889 338 or reversemortgages@heartlandfinance.com.au to discuss your options. We are here to help you.

This information is accurate as of 12 August 2021 and may change from time to time.