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Australia Takes a Hard Look at Requiring Reverse Mortgages for Some Pensioners
Australia wrestles with the challenge of funding old age pensions amidst crippling debt. Both the United States and Australia face the same challenge of funding payments to aging pensioners or seniors, and that’s where the similarities stop.
According to a recent article in the Daily Reckoning, Australia is facing a demographic bomb of sorts not unlike the U.S. with more than half of Australians projected to be age 50 or older by 2050. Today the Australian government spends $42 billion on the cost of aged care which is expected to balloon to $160 billion by mid century. Mathematically astonishing, economically unfeasible.
Timing is everything when it comes to the spending political capital needed to make hard choices. By 2055 pension reform down under may be impossible due to the fact that more than half of the electorate will be receiving their pensions by then. After all who wants to vote for their own pay cut?
Download a transcript of this episode here.
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