Retirement Planning & Experiences

[VPS]

There is the Centrelink reverse mortgage if you are age pension age. I think it is excellent , no need to do this ubiquitous downsizing which is so often suggested .

Does anyone have an experience using this - is this better than reverse mortgage with a bank?

I don't want to move because I'm in a great location and will be able to stay for many years here but want to release some capital for more travelling

 

[mrsterryn]

@VPS the old scheme was so incredibly coughbersome but this one appears to be a lot more easier though it is limited . I think when someone wants to stay at home and money is an issued that this would make life easier .

https://www.servicesaustralia.gov.au/home-equity-access-scheme

 

[CaptJCool]

Does anyone have an experience using this - is this better than reverse mortgage with a bank?

I don't want to move because I'm in a great location and will be able to stay for many years here but want to release some capital for more travelling

The take up rate of reverse mortgages is lowish
Estimated 40,000

The Rise of Reverse Mortgages in Australia - Lextech

Reverse mortgages are increasingly becoming part of Australia’s retirement finance mix. Once seen as niche or last-resort products, they are now used by tens of thousands of older Australians to access the value of their homes without selling or moving. According to the Australian Government’s...

www.lextech.com.au

Interest rate is 3.95%

A no negative equity guaranteeapplies to Home Equity scheme

This is different to a reverse mortgage provider

Reverse mortgage and home equity release - Moneysmart.gov.au

Understand how a reverse mortgage or other equity release product works. Get independent advice before you go ahead.

moneysmart.gov.au

So

4% compounded annually on $100,000 over 30 years would grow to approximately $324,339.59.

Breakdown:
- Principal: $100,000
- Interest: $224,339.59
- Total: $324,339.59

This calculation uses compound interest formula: A = P(1 + r)^n, where A is the future value, P is principal, r is annual interest rate, and n is years.

 

[Brissy1]

"Sure, individual circumstances might make staying put making sense and I understand
Emotional connections is a double edge sword. It can impose further costs and cause significant friction even with staying put.
My point is that downsizing should not be off the table.

There is a limited one off downsizer contribution of $300K per person (x2if couple) when downsizing - separate and in addition to any non consessional contribution. Potentially when downsizing a couple can put into super: 2x $300K downsizer contribution + 2x$360K non concessional contribution using bring forward arrangements - so potentially $1.68M in one year. This contribution would then pass to estate tax free upon Exit."

My mom and dad will never take advantage of the downsizer contribution. They are too risk-averse and also don't have the motivation to do the paperwork. I offer my time to do it for them but they say no. We, as a family, are much poorer than we would of been because of my dad's total lack of tolerance to risk and motivation in doing paperwork to save taxes and maximise expectation. And he would not let my mother or I do these things on his behalf. Lucky he's on a 6 figure lifetime annuity as a defined benefit pension. I ain't gonna be so lucky.


"Spending the kids inheritance is a growing trend."

My parents are on fully reversionary defined benefit pensions that's six figures for life. Lucky them.
My mother did get a big inheritance from her parents, being the only surviving child (and me being the only grandchild). Lucky her. There's no way they can run out of funds in their lifetimes.

Good on them, I wish my parents had spent more on themselves. My parents worked hard and spent a lot on raising us, and deserved to have spent all they had in retirement on themselves.
(btw you might want to check your maths there).

 

[VPS]

The take up rate of reverse mortgages is lowish
Estimated 40,000

The Rise of Reverse Mortgages in Australia - Lextech

Reverse mortgages are increasingly becoming part of Australia’s retirement finance mix. Once seen as niche or last-resort products, they are now used by tens of thousands of older Australians to access the value of their homes without selling or moving. According to the Australian Government’s...

www.lextech.com.au

Interest rate is 3.95%

A no negative equity guaranteeapplies to Home Equity scheme

This is different to a reverse mortgage provider

Reverse mortgage and home equity release - Moneysmart.gov.au

Understand how a reverse mortgage or other equity release product works. Get independent advice before you go ahead.

moneysmart.gov.au

So

4% compounded annually on $100,000 over 30 years would grow to approximately $324,339.59.

Breakdown:
- Principal: $100,000
- Interest: $224,339.59
- Total: $324,339.59

This calculation uses compound interest formula: A = P(1 + r)^n, where A is the future value, P is principal, r is annual interest rate, and n is years.

I won't be needing it for 30 years and if I do I doubt I'd be travelling anywhere

Thanks

 

[mel-world]

We have downsized and have recently started a HEAS through Centrelink even though we are self-funded at the moment. (Many more days like yesterday and we will be on an OAP sooner rather than later).
Our reasoning is that the value of our downsized property is rising faster than the amount we withdraw per fortnight plus the interest. Hopefully this will continue. Helps with everyday living to preserve what's left in Super a bit longer. Anyway, we only have on child and we have assisted him to buy his own property so he can get what's left.

I volunteer a couple of times a week delivering meals to the elderly in our council area in the affluent eastern suburbs of Melbourne. There are a number of very old people with early onset dementia still living in a very large house in need of some repair and with a garden full of weeks. I feel sorry for them as they want a chat saying that I am the only person they will see all day and they can only afford a carer once or twice a week. They cannot afford to move (or refuse to do so) but are still so asset rich.

 

[JohnK]

Are you serious - if either of your parents are not getting what you consider proper care in hospital you are very vocal about it

Too late now. No one cares nor do they care. They let dad rot, nurses and doctors alike, because they were more worried about their budgets.

Dad needed to see kidney specialist. All Home Care had to do was send someone out to clean up dad but said the budget ran out so they called ambulance instead to take dad to hospital. Dad received very little care in hospital and less than 1 week later passed away from losing too much blood and not eating.

Apologies to those who have people working in hospitals but everyone is important, not to be left on the side, out of the way to die. At least they had decency to put dad in his own room the last day or so but the care provided was awful. They should have brought in kidney specialist but they were more worried how it would look on their budget.

Oh and the 2 moronic ambulance drivers were even worse. Whinging and whining about taking dad to hospital and mum couldn't find dads pension cars that minute. They both talked down to dad and mum when they came to get dad. This is not professional behaviour. You don't treat criminals the same way.

If you or anyone else has had better experiences, good for you. I've now seen the poor care first hand 3 times, dad, mum and my wife. Totally inexcusable. No point complaining because everyone thinks they know better but do not bother listening or doing anything about it. (Fancy a nurse telling a patient in the renal ward to wait 2-3 hours for the assistants to start in the morning to refill their wayer. Seriously? Severe kidney infection has to have water often but this nurse cared more for socialising and social media than their patient. Oh and they did this when I was there visiting wife but after I waited an hour I went to get water myself and when they saw me made a fuss that they forgot. Yep forgot. They should really find another profession as nursing is not for them)

Bye dad. Im not leaving my care in their incapable hands which is why I'll be off to Thailand when the time comes that I need care.

 

[clifford]

Too late now. No one cares nor do they care. They let dad rot, nurses and doctors alike, because they were more worried about their budgets.

Dad needed to see kidney specialist. All Home Care had to do was send someone out to clean up dad but said the budget ran out so they called ambulance instead to take dad to hospital. Dad received very little care in hospital and less than 1 week later passed away from losing too much blood and not eating.

Apologies to those who have people working in hospitals but everyone is important, not to be left on the side, out of the way to die. At least they had decency to put dad in his own room the last day or so but the care provided was awful. They should have brought in kidney specialist but they were more worried how it would look on their budget.

Oh and the 2 moronic ambulance drivers were even worse. Whinging and whining about taking dad to hospital and mum couldn't find dads pension cars that minute. They both talked down to dad and mum when they came to get dad. This is not professional behaviour. You don't treat criminals the same way.

If you or anyone else has had better experiences, good for you. I've now seen the poor care first hand 3 times, dad, mum and my wife. Totally inexcusable. No point complaining because everyone thinks they know better but do not bother listening or doing anything about it. (Fancy a nurse telling a patient in the renal ward to wait 2-3 hours for the assistants to start in the morning to refill their wayer. Seriously? Severe kidney infection has to have water often but this nurse cared more for socialising and social media than their patient. Oh and they did this when I was there visiting wife but after I waited an hour I went to get water myself and when they saw me made a fuss that they forgot. Yep forgot. They should really find another profession as nursing is not for them)

Bye dad. Im not leaving my care in their incapable hands which is why I'll be off to Thailand when the time comes that I need care.

I fully understand what you are saying, but (as a centrelink pensioner, amongst other things), I've found the care in ACT hospitals to be not too bad. Not wonderful, but better than what you are describing.