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A new pension, on the house Paul Resnik of Resnik Consulting Group suggests that reverse mortgages could be used as a de facto allocated pension with the money invested in a traditional investment portfolio to supplement superannuation and other retirement savings. The portfolio would be assets tested and the income would be deemed as well as subject to tax assessment. For all the reasons mentioned above it is clear that reverse mortgages are likely to win a spot in the retirement planning arsenal. Former Victorian Premier Jeff Kennett, who is the chairman of reverse mortgage company Australian Seniors Finance, estimated recently the fledgling $700 million market could soon be worth up to $2.5 billion. |
| The first $40,000 drawn from a reverse mortgage is exempt from the assets test for 90 days but is assessable after that time if the money has not been spent. Amounts over $40,000 are assessable from day one and subject to deeming rates. Some loans offer instalment payments which would avoid this problem. |