A New Solution To Ease The Elderly Poverty--House-for-Pension Pattern

The financial problem of the seniors looms up in China, since the seniors and one-generation families have substantially increased nowadays. On the other hand, the social security of our country is still underdeveloped and the foundation of pension is short of money. What's more, the traditional dependence of seniors on their descendants has been gradually challenged by the new social culture, which is a byproduct of developing socialistic market economy. Therefore, new methods to raise the elders shall be introduced to China. To get financial support to better their life, Chinese seniors traditionally depend on their next generation and/or on the money they have. This paper introduces houses owned to seniors as the third resort for seniors, namely the idea called House-for-Pension. Till now the relative research has focused on the feasibility of applying this new concept to Chinese modern society.The idea of House-for-Pension allows seniors to cash the estimated value of houses when they die while they can still live in houses before they die. This idea is primarily based on the Life Cycle Theory and can help people get utility maximization over their whole life. According to comparison of reverse mortgage in United States with the pattern of "Selling-House-for-Pension", which is created by a Chinese Professor Chai Xiaowu, this paper then gives a detailed discuss about probability of introducing the idea of House-for-Pension to China. Further research is needed here.