When it comes to securing your financial future in retirement, the family home can be your most valuable asset. For Age Pension homeowners, owning a home offers not just the comfort of stability, but also tangible benefits for your financial situation. However, for retirees who don’t own their homes, the challenges of rental and housing affordability can significantly affect their retirement prospects. Today we explore the advantages for homeowners while acknowledging the difficult circumstances non-homeowners face in today’s housing market.
The benefits for homeowners
For retirees who own their homes outright or are close to doing so, there are many ways that your home can work for you in retirement. Research shows the family home is typically the largest asset for most Australian households, followed by superannuation (ACOSS & UNSW, 2020). Together, these two major assets – your home and superannuation – serve as the foundation of retirement security, with the Age Pension providing additional support to help ensure a comfortable lifestyle. The Age Pension system is designed with several benefits for homeowners, and if you’re lucky enough to own your own residence, these benefits can help stretch your retirement income further.
Age Pension means test exemption
One of the most significant advantages of homeownership is the exemption of your home from the Age Pension means test. This means that the value of your family home (and any mortgage loan on it) will not count toward the assessment of your assets when determining your eligibility for the Age Pension. For homeowners, this exemption can make a real difference in your overall entitlements, as the Age Pension is means-tested based on assets and income.
Equity access
In many cases, your home is the largest source of wealth in retirement. If you plan to stay in your current home, you can access your home equity in various ways to supplement your income. For some, this could mean releasing equity to help cover living expenses or to top up superannuation. The ability to tap into your home’s value can be a lifeline for homeowners struggling to make ends meet on a fixed income.
There are several options available to access your home equity:
- The Home Equity Access Scheme (HEAS), offered by the Commonwealth Government, provides homeowners aged 67 and over the opportunity to access equity in their home as a government loan. The loan is repaid when the home is sold or the homeowner passes away.
- Reverse mortgages allow you to borrow against your home’s value without requiring monthly repayments. Instead, the loan is repaid when you sell your property or no longer need to live there. However, they typically come with higher fees and interest, so it’s essential to understand the loan terms fully.
- Wealth release products involve selling a portion of your home’s value, often through shared equity arrangements. This option allows you to access funds while retaining partial ownership of your property.
These home equity loans can provide valuable financial flexibility, but it’s important to approach them with caution. They can affect your Age Pension entitlements and have long-term implications for your financial future.
Superannuation and the family home
While superannuation is a vital part of many retirees’ financial plans, the family home often far exceeds the value of super in terms of wealth. However, unlike super, your home is not a liquid asset—it’s not easily accessible unless you sell or borrow against it.
The latest figures highlight this wealth disparity: the median super balance for individuals aged 60 to 64 in June 2021 was $211,996 for men and $158,806 for women, while the median house price in Australia as of December 2024 was $976,800 (ABS, 2025; ASFA, 2024). This means that for many retirees, the value of their home is around four times greater than their superannuation savings.
Some homeowners choose to boost their super by downsizing, using the downsizer contribution rule, which allows you to contribute up to $300,000 (per person) into your super from the sale of your family home. This can help grow your retirement savings and provide a more comfortable income stream. However, downsizing is not without its considerations, and homeowners need to weigh the potential loss of (or reduction in) the Age Pension benefit if they increase their asset base too much.
The struggles of non-homeowners
While homeowners in retirement have various options for accessing wealth, non-homeowners face a much tougher reality. For renters, the ongoing cost of rent, combined with a fixed income in retirement, can be a significant burden. Renting often means that retirees have little to no equity built up and are reliant on a pension that may not cover rising rent prices.
Housing affordability continues to be a pressing issue across Australia, particularly for retirees who have not owned a home. With rents continuing to rise, non-homeowners may find themselves forced to allocate a large portion of their Age Pension towards securing a roof over their heads. In some cases, this means sacrificing other important areas of their retirement, such as healthcare, lifestyle activities, or travel. In their report to government to inform decision making for the 2025-26 Federal Budget, The Economic Inclusion Advisory Committee (EIAC) recently highlighted the severity of this issue, noting that despite a 45% increase in Commonwealth Rent Assistance (CRA) since 2022, around 40% of recipients remain in rental stress. The EIAC has recommended further increases to CRA to better support those struggling with housing costs (EIAC 2025 Report).
Moreover, renters are vulnerable to market fluctuations—unlike homeowners who are insulated from interest rate rises if they own their property outright, renters face higher costs every time the rent increases. The absence of a home to fall back on means they may be forced to live in areas that are less desirable or further from family and services.
The lack of homeownership also affects the ability to access home equity products like reverse mortgages or the Home Equity Access Scheme. Without the ability to tap into their property wealth, non-homeowners face limited options for supplementing their income in retirement.
Closing thoughts
While owning a home offers many advantages for retirees, especially in terms of Age Pension benefits, non-homeowners must navigate a much more challenging landscape in today’s housing market. The struggle with rental affordability and rising costs means that many non-homeowners may experience financial hardship as they attempt to make ends meet in retirement.
It’s clear that homeownership offers valuable opportunities for retirees, from increased Age Pension eligibility to the ability to access equity to support their retirement lifestyle. However, it’s essential to acknowledge the struggles faced by those who don’t own a home, and the importance of providing support and solutions for renters, who also deserve a dignified and secure retirement.
Retirement Essentials helps retirees plan their retirement and maximise their income through affordable, bite-sized advice consultations with qualified professionals. If you’re considering how your home fits into your retirement plan, we can help with:
- Retirement forecasting: See how your home equity fits into your retirement plan and how long your money may last.
- Superannuation strategies: Learn how to boost your super and improve your income during retirement.
- Maximising your entitlements: Ensure you’re receiving all the entitlements you’re eligible for by reviewing your Centrelink options.
- Managing your mortgage: If you still have a mortgage, we can help you explore whether repaying or maintaining your mortgage in retirement is the best option for your financial situation.
What do you say?
Do you think the Age Pension system favours homeowners over renters? If so, how would you even things up?
How has owning or renting affected your retirement planning? We’d love to hear your experience.
This article is provided by Retirement Essentials Representative Number: 001260855. We are an authorised representative of SuperEd Pty Ltd ABN 88 118 480 907 AFSL #468859. This information is not intended as financial product advice, legal advice or taxation advice. It does not take into account your personal situation, goals or needs and you should assess your own financial situation, consider if the information is suitable for you and ensure you read the relevant Product Disclosure Statement (PDS) if you choose to make any changes to your financial situation. It is always advisable to consult a financial adviser before making financial decisions.
