Pension income from your home equity

The Netherlands is a wealthy country, but a lot of that wealth is locked into pensions and home equity. This is part of the reason why the Dutch government has announced the intention to create pension freedom (via a lump sum at retirement) and to explore for opportunities in which pension and home equity wealth can be combined in a more flexible household financial plan. In this report, we study the different means with which we can currently liquidate home equity in order to increase our income after retirement. At the moment, two liquidation methods are available; attracting a loan versus selling the property. Both methods can be executed in different ways, and in each case the consumer and product provider face varying risks and costs. In a short financial analysis, we project the risks, benefits and costs for each option. We end the report by offering a set of recommendation to policymakers, pension fund managers and bankers, with which Dutch home-pension combinations can be extended in the years to come.