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Option 3b incurs interest on the drawn down equity, so unless you invest in high yielding assets you'll be paying more interest than receiving income - so it's possible you'll be going backwards if you're trying to acheive higher income. KJ

So you're saying there is a 50% chance of a prolonged slump ? And therefore a 50% chance of 'disaster' (your words to SC). I'm all for seeing the glass is 1/2 full, but I'd consider the glass is mostly empty if there's a 50% chance of disaster. I agree entirely. However, the question was...

I plan to live for at least 50 years in retirement. What do you think the odds of a prolonged slump are some time in the next 50 years ? Therein lies the risk. How would you compare the risk of 'living off equity' to the more conventional retirement method of living off income ? KJ

I believe residential IP is good for getting growth, however the yield is usually crap. So for building an asset base residential IP is great. When I've got a reasonable asset base I can retire. But when I retire I need a good yield indexed to inflation - this means lower growth - I can't...