Jour Fixe - Home Equity Release Products and Retirement Provision

Home Equity Release Products and Retirement Provision

Due to the challenges accompanying demographic change, responsibility for old-age provision has shifted from the state level to the individual level over the last decades. While individuals' motivation usually is to live rent-free during retirement, they may not be aware that their accumulated housing equity is also a contribution to their later livelihood. Individuals face various options, for example a real estate life annuity or a reverse mortgage. In our study, we aim to answer the following research questions: Is the home equity release decision determined by the offer? And what factors drive the decision? Therefore, we conduct a vignette study in Germany during fall 2020 with 2,660 participants. Our sample is representative of the German adult population aged 30 and older. We ask the participants to make a decision for a retired couple who lives in their debt-free home. Also, we study heterogeneity with respect to home ownership.