NETSPAR BRIEF 17: House and pension as Financial legos
Many Dutch people accrue wealth through their pensions and home ownership, but this is largely a passive activity. The wealth piles up and cannot always be mobilized at desired points in their lifetime. Things could be different. The Dutch government encourages more active financial planning on the part of households. The possibilities afforded for taking such financial decisions, however, are still limited and, moreover, unknown. The opportunities and risks of various lending and selling constructions are complicated and difficult for consumers to oversee. Yet on the other hand, homeowners could see their pension income grow by up to 25% if they could mobilize the wealth now carved in stone sooner.
LEGO blocks
In this 17th edition of the Netspar Brief, Dirk Brounen (TiU), Eduard Ponds (TiU), and Niels Kortleve (PGGM) outline a number of home ownership–pension combinations and discuss the impact they could have as “financial LEGO blocks” for achieving greater flexibility in financial planning. In particular, they examine the options for cashing in on home equity and the attendant advantages and disadvantages, as well as costs and risks. In addition, the authors offer a new perspective on the future and provide some recommendations for the various actors on how to devise workable and successful home equity–pension combinations.
Read the Netspar Brief (available only in Dutch)
Extra video: Marike Knoef about The wealth accumulation of Dutch households after retirement (available in Dutch only)
Reading tips:
- Pensioenaanvullingen uit het eigen woningbezit (Pension income from your home equity), Dirk Brounen, Eduard Ponds en Niels Kortleve (2019) LINK na publicatie paper (30-09)
- Towards integrated personal financial planning, Nitesh Bharosa, Marijn Janssen (2019)
- Optiewaarde in de levenscyclus: De waarde van flexibiliteit voor individuen bij het plannen van hun pensioen (Option value over the life cycle: The value of flexibility for individuals in planning their retirement), Sonja Wendel, Bas Donkers, Benedict Dellaert (2018)
- De routekaart naar een meer integrale benadering van wonen, zorg en pensioen (Road map for a more comprehensive approach to housing, healthcare, and retirement), Bart Boon, Casper van Ewijk, Eugene Rebers, Frits Bart, Lans Bovenberg, Michael Visser, Niels Kortleve (2016)
- De toereikendheid van pensioenopbouw na de crisis en pensioenhervormingen, Marike Knoef, Jim Been, Koen Caminada, Kees Goudswaard en Jason Rhuggenaath, 2017
- Welke keuzemogelijkheden zijn wenselijk vanuit het perspectief van de deelnemer? Casper Van Ewijk, Roel Mehlkopf, Sara van den Bleeken, Chantal Hoet, 2017.
- Internationale vergelijking van kapitaalgedekte pensioenstelsels.
Keuzevrijheid kan ruimer, risicodeling internationaal verschillend. Netspar Brief 3, Marcel Lever, Eduard Ponds, Ryanne Cox en Manuel García Huitrón, 2015