Retirement Planning
Plan for Your Retirement
As the population continues to age, so is the growing demand for additional sources of income as part of retirement planning.
ASAG’s team can assist retirees who are short in savings and superannuation to improve their lifestyle through home equity release products such as the A.S.A.G. Reverse Mortgage.
Increase your retirement income through A.S.A.G. Reverse Mortgage
A reverse mortgage is just a loan. The big difference is, how you pay it back.
It gives Australian seniors a loan option to borrow against locked away home equity to access funds based on their age and the amount of equity the property holds.
Compared to other loans, you don’t have to make regular repayments, though you can do it voluntarily without penalty. Instead, the loan is paid out at the end when the property is sold, you permanently leave the property or you pass away.
Outlining Retirement
Every adult is either dreading the day or looking forward to the day that they hit retirement age, maybe even opt for an early retirement. While the period may be a solemn exit from a lifetime of fruitful labours, there’s much to consider before you make that leap.
The roadmap to retirement often begins several years ahead of any expected date. When broken down, the sections cover aspects such as:
Age
The expected retirement age is tricky to assess depending on your goals. Some experts state that people in their 20-30s with a target retirement in the mid-60s will have at least three decades to map out finances and figure where to invest any disposable income, like secure assets with reasonably projected dividends.
People already setting sights on a 60-65 age retirement but are currently pushing 40-50, meanwhile, may have to be more careful with managing finances, and require further guidance with a retirement planning specialist.
Lifestyle
The retired life will carry a very different tone from what you are accustomed to. Extensive discussions with a partner would delve on factors like where to live your retirement, connections with family and the community going forward and what activities you will pursue that you may have wanted to do for a long time.
Emergency reserves
Retirement can bring some unexpected circumstances and as such, there must be a sufficient amount of cash saved in a readily-accessible account that will only be tapped when it is absolutely necessary.
Projected expenses
Even with a purportedly large nest egg, mismanagement can still derail any plans to enjoy a quiet retirement, hence a need to break down expenses against the current state of your finances.
The Association of Superannuation Funds of Australia (ASFA) report for March 2022, for example, tags the annual budget for individuals or couples to live a comfortable lifestyle at $46,494 and $65,445, respectively – and that is based on whether they are fully healthy and have a home whose mortgage is paid off.
The annual budget for living a more modest lifestyle, the study adds, is estimated at $29,632 (individuals) and $42,621 (couples).
Family assistance
Your children may have moved out into the world and built their own lives, but sometimes, they could come to you for financial help in certain matters. Assessing your retirement needs and finances will be key to extending loved ones a hand when they need it.
Benefits
Through means of a regular payments you receive through a regular instalment option, the A.S.A.G. Reverse Mortgage can be combined with your savings, Age Pension, superannuation, and other income sources to meet your funding or refinancing needs in retirement. Other benefits include:
Homeownership
You remain the owner of your home and enjoy any growth in property value.
Lifetime Occupancy
Guaranteed to prevent the lender from removing you from your home against will. Also, they cannot force you to sell your home as long as you meet your obligations under the reverse mortgage.
No Negative Equity Guarantee (NNEG)
A law protecting reverse mortgage borrowers from owing more than their home’s value and being liable if the property is sold for less.
Retirement Financial Planning
A.S.A.G. can tailor the loan as directed by you to meet your requirements in your retirement planning. Allowing you to improve and manage your income for peace of mind.
Settling Debts
It is highly probable that you have racked up debts along the way, and you must account for liabilities that may sap your retirement finances down the line.
An exhaustive accounting of those arrears would help categorise which are “good debts” – debts incurred in revenue-generating ventures – or “bad” debts such as credit-card debt, buy-now-pay-later, student loans, and any existing mortgages, and find a way to pay them off.
The mortgage is very significant: various studies peg the average household debt in Australia at roughly $250K, with home loans accounting for at least 56 per cent of it. Some mortgage professionals may even ask, “how old would you be when you finally pay off that loan?”
Estate Plan
Retirement will definitely factor in end-of-life and estate planning discussions. To this end, the retiree should seek ample guidance on preparing for the inevitable, which includes partitioning any assets to loved ones per a will, setting up a life insurance policy well beforehand, and to arrange for funeral loans to cover potential expenses when a loved one passes on.
The same situation will also apply in case a retiree is already in serious condition and is incapable of making important decisions.
Here’s a step in your retirement financial planning:
- Use the A.S.A.G. Reverse Mortgage Calculator to assess an estimated amount of accessible equity in your home.
- Lodge an enquiry via the A.S.A.G. Submit Application button.
- Or call us on 1300 002 724 to talk to one of our team members.
Our commitment to you is a long-term service. The A.S.A.G. team will be with you throughout the entire process, with ongoing support and valuable information available at any time.
Asset Spread
Many retirement finance professionals attest that planning ahead for retirement requires a careful accounting of what assets you already have that can finance the retirement. The major examples are:
Property
Your own property or properties will have built up equity over time due to moves such as paying off the original mortgage within terms and having done renovations, especially in the kitchen and bathroom. To this end, the property can be leveraged for a reverse mortgage or Centrelink funding under the Home Equity Access Scheme. The reverse mortgage may also finance certain needs for seniors like home aged-care programmes.
Super fund
The super fund can draw a considerable bulk of the finances needed for retirement. One key way to ramp up that account is to make periodic voluntary contributions, which will ease tax obligations down the road, let alone increase the amount per contribution.
Your super administrator can advise you when you will be able to access the account, either as annuities, a lump sum, or account-based pension. It may be possible to access the super as part of a transition to retirement (TTR) pension when you reach preservation age as part of winding down work activities. However, some financial advisers may not approve of that option as there might be less super money available when you retire.
There’s also much deliberation needed before you could ever access the super to pay off any expenses. A recent ASFA study reported in InQueensland revealed that the federal government’s early-release scheme to aid Australians affected by the pandemic resulted in approximately $38 billion in super payouts. Around one million of the 4.78m applications lodged ended up in closed or vastly-drained super accounts.
Government-mandated benefits
A careful review of your age, assets, and income stream will parlay into accessing government-mandated benefits including the Age Pension, Pensioner Concession Card, and possible tax offsets as calculated by the ATO. The age threshold for the Age Pension, in particular, is already set at 66 years and six months and will change to 67 years flat in July 2023.
Existing investments and savings accounts
Even in retirement, some ventures you have invested in over the years may still draw you a certain degree of cash flow. Take the time to catalogue them all and plan accordingly, as certain investments can be poised for stronger returns or go sour altogether. Your financial adviser can also guide you on the potential tax obligations and the rate of return. The amount you have saved in the bank will be just as critical.
Frequently Asked Questions
Reverse mortgages are government regulated, comply with vulnerable client protection, and subject to stringent lending criteria. All applicants will be properly assessed if they have sufficient equity in their home. They must also be able to maintain their property and keep it insured throughout the loan term.
Accessing some capital now will reduce the amount of your home equity. However, with a good approach, we will ensure you have enough for your children’s inheritance and aged care later on.
Drastic financial changes will be inevitable, so it’s important to consult your retirement plan with the experts, such as Centrelink or a financial adviser.
What People Say About Us
I have been absolutely thrilled with not just the professional service offered by ASAG but also by their kindness and understanding. Compared to two other major Reverse Mortgage companies who between them took 13 months to decline my application due to me living in a resort I have found Gavin Luka at ASAG extraordinary in his patience with any amount of questions which were answered so promptly and in full. A very happy life ahead.
Kathy on Trustpilot
22 Mar 2022
We are very happy to “highly recommend” Gavin Luka for providing his thoughtful, empathetic, personable yet professional service during the acquisition of loan process. Gavin’s ability to ‘make it happen’ in a calm, seamless manner at a very stressful time for us – meant a lot.
Thankyou Gavin, what a ‘star’. Blessings to you
ASAG are very fortunate to have you on their team. Well done.
Carol Fleming on Trustpilot
9 Mar 2022
This was a very pleasant experience
This was a very pleasant experience. Plenty of guidance given along the way. Some anxiety but now looking back nothing to be concerned about. Thank you Gavin and his team.
Sandra Phillips on Trustpilot
7 Mar 2022
dealing with paul and gavin extremely easy
dealing with paul and gavin was extremely easy and also very pleasureable. if taking out a reverse mortgage i would reccomend asag to anyone.
Bob Manskie Manskie on Trustpilot
7 Mar 2022
I have used this company very recently and especially Gavin.He was so helpful in every way and talked me through everything that I needed to do.He was so polite , understanding and gentle with this gal as I was sick at the time but he just explained it all step by step and made the whole procedure as painless as possible though it wasn’t as easy a procedure as I’d hoped.They always answered the phone promptly and if Gavin wasn’t immediately available he’d always ring back very promptly.I can assure you this company is so easy to deal with.
Heather on Trustpilot
7 Mar 2022