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peak levels of income, and therefore could reap the benefits of abundant
food, apparel, and even real estate.
This brings us to the issue of how many baby-boomers are
considering unlocking the value of their homes and finding ways to finance
their retirement years. Given the decline in pensions and retirement-savings
losses so many boomers have experienced, there is no doubt that home
equity will become an increasingly important financial tool for them.
Retired home-owners used to have a few options. They could sell
their properties and perhaps move into something smaller, in with their
families, or into rental property. Another option would be to borrow against
the equity of their home, but then they would have to face monthly loan
payments, a difficult hurdle for some.
Luckily, in some countries, there is a financial scheme called a
"reverse mortgage".
This allows home-owners of a certain age (mainly 60 or over) to
borrow against the equity in their house and pay off the loan plus
accumulated interest when they die, move out, or sell the house. This means
they don't have to make payments as long as they live there. But they need
to have paid off their original mortgages to qualify for this scheme.
Reverse mortgage is based on the assumption that many retirees are
"house rich" but "cash poor". And while getting old, they may face rising and
unexpected medical expenses, home repairs, and other costs not covered by
their pensions or benefits.
A reverse mortgage allows them access to tax-free cash without the
burden of monthly payments.
The US is the biggest market in the world for reverse mortgages. In
Asia, South Korea and Hong Kong also have reverse-mortgage schemes in
place, but with different results. Applications for the scheme in South Korea
have surged, while in Hong Kong, where home prices have doubled in recent
years, reverse mortgages have drawn little interest, as retirees opt to resell
their homes or rent and use the remaining cash.
As for Thailand, we may not realise that we have been classified as
an ageing society since 2003. According to
the National Statistical Office
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