Senior Homeowners: Financing Your Retirement Without Giving Up the Chance to Pass on Your Home
The first edition of the “Senior Citizens, Wealth, and Inheritance Barometer,” conducted by OpinionWay for Merci Prosper, shows that nearly one in two senior homeowners say they are under financial pressure. Many say they would be willing to tap into the equity in their homes, provided they understand the terms and conditions.
For a long time, owning one’s primary residence was enough to ensure that a household was considered financially secure in France. The “Senior, Wealth, and Inheritance Barometer”—the first edition of a survey conducted by OpinionWay for Merci Prosper among 1,003 homeowners aged 60 and older—offers a more nuanced view of this situation.
Nearly one in two older homeowners reports feeling financial pressure at the end of the month: 42% say they carefully weigh every expense, and 5% dip into their savings or rely on outside assistance—for a total of 47%. This phenomenon affects people across all demographics but is particularly concentrated among certain groups: women (53%), those aged 60–64 (53%, compared with 32% among those over 80), those with incomes below 24,000 euros per year (more than eight in ten), people who are single, widowed, or divorced (56%), and residents of rural areas (53%, compared with 37% in Paris).
The Grand Est region ranks above the national average, at 59 percent. For some members of this generation, significant real estate assets coexist with a lack of liquid assets: real estate holds value on paper but does not provide for daily living expenses. It is precisely this disconnect between a property’s value and available cash that the barometer quantifies, contrary to the common perception of the wealth of senior homeowners.
Real Estate Assets Without Liquid Assets
Faced with a decline in purchasing power or an unexpected expense, the vast majority of senior homeowners would cut back on leisure activities and spending or dip into their savings (94%), and nearly half would consider taking out a consumer loan (49%). One in three relies on their home to make ends meet (32%), whether by selling to downsize, moving into a rental (26%), or opting for a life annuity (6%).
In principle, 46% say they are willing to use the value of their home to finance their retirement, even if it means reducing the share passed on to their heirs; this figure rises to 60% if they had a specific reason to tap into part of the property’s value. The motivations cited reflect the needs of an active later life: financing the loss of independence at home, care services, or home modifications, for 36%; funding a move into a senior living community or a long-term care facility for 32%; covering healthcare expenses for 26%; providing financial support to their children while they are still alive for 20%; and supplementing their income for 16%. Next, at lower levels, come emergency savings, energy-efficiency renovations, or a leisure project.
More specifically, 14% cited a separation, the death of a spouse, or a change in family circumstances; 12% cited building a financial cushion; 10% cited energy-efficiency renovations; and 7% cited a leisure project such as a trip or a car. Long-term care and health concerns dominate, a sign that monetizing one’s home is primarily viewed as a response to the costs of aging, rather than as a luxury.
Inheritance is no longer at odds with monetization
France is entering a period in which nearly a quarter of household wealth will change hands over the next decade, in a country where 70% of people over 60 own their primary residence, according to INSEE. The survey shows that the attachment to passing down property remains strong—81% of seniors value this practice—but that it is no longer the only option: 46% are willing to reduce the value of their home.
Traditional arrangements still dominate public perception: 95% of respondents are familiar with life annuities, and more than one in two are familiar with reverse mortgages, while 93% are unaware of partial property sales—which involve transferring a portion of the property before a notary while continuing to live in the home—even though this is neither a loan nor a life annuity. Nearly four in ten seniors would consider this option for their primary residence, and 72% would make the decision together with their children—44% by seeking their consent and 28% by simply informing them.
For high-net-worth clients, the trade-off between enjoying a better quality of life today and leaving an inheritance for the future thus arises once again, but each option comes with its own cost: uncertainty regarding life expectancy for a life annuity, capitalized interest for a reverse mortgage, and a discount on the portion sold for a partial sale. It is best to discuss this choice with a notary and a wealth management advisor, taking into account the tax implications, the impact on the estate, and how the decision aligns with overall income and assets, rather than reacting to a one-time cash flow problem.
