Understanding the Retirement Funding Dilemma Facing Thousands of Older Australians
Are You Asset-Rich but Cash-Poor?
For many Australians approaching or already in retirement, there’s a strange paradox that creeps in quietly. On paper, you’re wealthy, or maybe even in the top tier of household wealth. You own your home outright or are close to it, and property prices have soared over the years.
But when it comes to spending money? Paying for groceries, managing rising health costs, keeping the lights on, or enjoying the occasional trip or lunch out with friends it can feel like a struggle.
This is the all-too-common reality of being asset-rich and cash-poor.
What Does ‘Asset-Rich, Cash-Poor’ Actually Mean?
In simple terms, it means your wealth is tied up in things you can’t easily spend. Like your family home while your day-to-day cash flow is limited.
For example, you might own a $1.5 million home in Sydney’s inner west, but your only income is the Age Pension or a modest superannuation drawdown. That makes it hard to afford the life you want, despite your high net worth.
And you’re far from alone. According to data from the Australian Bureau of Statistics, more than 75% of Australians aged 65 and over own their home outright. But many rely on the Age Pension as their primary income source.
The ASFA Retirement Standard (December 2024) estimates that to live a comfortable retirement, a single person needs around $51,805 per year and a couple needs $73,077. That’s far above the full Age Pension, which currently sits at about $29,874 for singles.
So where does that leave retirees who’ve done everything “right”- worked hard, paid off the mortgage, and raised a family but now face tight budgets and difficult choices?
The Problems of Being Cash-Poor in Retirement
Here are some of the common issues faced by asset-rich, cash-poor retirees:
- Struggling to keep up with rising living costs, especially essentials like food, energy and insurance.
- Putting off medical treatments or necessary home maintenance because of affordability concerns.
- Feeling trapped in the family home, even when it no longer suits their lifestyle or physical needs.
- Living with anxiety or guilt about spending, especially when it comes to ‘non-essential’ things like travel or socialising.
- Being unable to help adult children or grandchildren financially, despite wanting to.
All of this can lead to a retirement that’s defined by worry, rather than freedom.
What Are Your Funding Options in Retirement?
Traditionally, retirees in this situation have had a few choices:
- Downsize the home – sell the family home and move into something smaller and cheaper. This can unlock capital but comes with emotional upheaval, potential tax consequences, and lifestyle changes.
- Access the superannuation – if there’s enough left, draw more to boost income. But this risks running out of funds too early.
- Rely solely on the Age Pension – many do, but it often falls short of what’s needed for comfort.
- Take out a reverse mortgage – existing products allow people to borrow against their home equity, but many come with compounding interest, rising debt, and a loss of control over the long-term value of the home.
Introducing the Equity Preservation Mortgage® by Futureproof
Futureproof’s soon-to-be-launched Equity Preservation Mortgage® has been purpose-built for older Australians who want to live better now, stay in the home they love, and preserve wealth for the future.
It’s a fresh take on equity release that puts retirees in control.
Key Benefits:
No need to sell your home or make regular repayments
Equity is preserved, not eroded – thanks to a structure that caps how much equity is released
Stay in control of your financial future, while enjoying life today
Use the funds however you choose – cover living costs, healthcare, home modifications, or simply enjoy retirement
Protects the family legacy, making it easier to pass on wealth
This isn’t just a loan. It’s a carefully considered financial tool designed to give retirees peace of mind both now and later.
Is It Right for You?
If you’re:
- A homeowner aged 60 or over
- Living on a fixed income
- Keen to stay in your home and live comfortably
- Concerned about eroding your estate
- Looking for an ethical, sustainable way to access your home’s value
…then the Equity Preservation Mortgage® could be worth exploring.
What’s Next?
At Futureproof, we believe no one should feel financially stuck in retirement especially not when they’ve built up so much value in their home.
We’re here to help you navigate your options with clarity and confidence, so you can make choices that support your goals, values, and legacy.
If you’d like to learn more about how our Equity Preservation Mortgage® works follow us on LinkedIn or register your interest via our contact form.
Let’s make retirement everything you hoped it would be.
