Building the pillars of retirement income. What role for housing equity in easing financial stress in later retirement?

摘要

The financial and cultural implications of people growing older in developed countries around the world are of increasing interest and concern to government, community and industry stakeholders. A key emerging problem is that some retirees do not have sufficient asset liquidity to finance post-retirement consumption needs, even though they may own substantial assets in the form of housing equity in which Australians have traditionally held a substantial proportion of their wealth. However, the actions of many Australians are at odds with behavioural lifecycle theory which predicts that in the later years of life, individuals should de-accumulate assets (including housing equity) to support retirement consumption needs. Housing also does not readily fit in the ambit of Modern Portfolio Theory. The family home has potential to undergo a revolutionary change from a direct investor private financial asset to a more flexible, and even securitised, financial instrument, taking into account its function for individuals, families and communities. Financial products in retirement are beginning to undergo reframing to accommodate the financial and cultural dynamics inherent in housing equity release. The purpose of this paper is to examine the role of housing equity in supporting retirement consumption and income needs, and its potential in easing financial stress in retirement. Using the comprehensive panel of data in the Household, Income, and Labour Dynamics in Australia (HILDA) Survey and other sources, this paper will present data to improve our understanding of housing as part of Australian household portfolio composition and the experience of homeownership for different Australian households. The research focuses on the Australian context for evidence of the determinants that support homeowners in building wealth, and aims to identify the issues that impact upon home equity de-accumulation. This research has important implications