Retirement can be an overwhelming process for many individuals - its inaudible slither creeps up unexpectedly and out of the blue you are confronted with a hurricane of discombobuluation, disorder and distress. Later life’s emotional rollercoaster is an inevitable part of our existence and is often forgotten about or disregarded during the countless years that are incinerated on our own respective employment journeys.
Adapting to this transition can be difficult for retirees, but a methodical approach and attention to detail when planning your retirement will considerably proliferate your lifestyle when you reach the stage you have spent working hard your whole life for.
According to Roy Aldridge of global investment management firm Barings – preparation is key. "Investing for your retirement is about long-term planning and as people are living longer, more emphasis needs to be put on how a lengthier retirement will be funded.” But to what extremes should you stretch to help subsidise the comfortable lifestyle you desire?
The bricks and mortar that make up your property could prove to be a valuable commodity when it comes to generating more cash to fund your retirement plan. Proceeds from company and private pension schemes are uncertain, as they depend on how investments perform, whereas last month witnessed a resurgence in property prices following a volatile period in the light of the vote to leave the European Union.
A survey carried out by the Royal Institution of Chartered Surveyors' showed that British house prices rose last monthat the fastest pace since April as a shortage of new homes intensified, adding to cautious signs a recent slowdown in the market is now easing. There are many ways in which you can convert this asset into a valuable source of revenue to ensure you can live your retirement to the full.
It is common for people to downsize once their children have flown the nest; although be guarded that a house half the size will not be replicated in the fee if you are longing to reside in the same area. Alternatively, selling up and renting is becoming an increasingly popular undertaking by retirees who are becoming driven by the financial benefit and variability that renting a property can provide.
Becoming a tenant instantly eradicates the extortionate fees associated with moving house and the hassle of property maintenance, whilst instead breathing a new flexible impetus into your everyday life. “It's common for people to want to move near their children and grandchildren in retirement, but this might not be possible if they live in a more expensive part of the country. Selling up and renting may enable you to make the move,” clarifies Dean Mirfin - group director at Key Retirement Solutions.
If your wealth is locked into your property then you may decide to release equity to pay for retirement which can help you access cash without moving. This notion involves borrowing against the value of your home or selling all or part of it for a lump sum or a monthly pay packet. However, the interest on the money that you release will accumulate rapidly; resulting in the final repayment owed being considerably inflated and expensive.
Another harsh reality that many of us are forced to mull over when mapping out our financial futures is the need to sell our property to pay for care home fees. “One in 10 people end up paying more than £100,000 in care costs in old age, research has shown.” Therefore, when moving into or assisting a loved one into a care home, it is imperative you aware of the decree outline the costs, affordability and assistance that is available for all involved.
Sadly up to 40,000 people a year with limited income or savings end up selling their property to cover care costs. Some councils offer a ‘deferred payment’ scheme, meaning they deduct the fees from the value of your home when it is eventually sold, which may be after you die.
There is no doubting that it appears perilous relying on one source of income during your retirement years, but as many as three million people are setting up this time in life around the money generated from the sale of their property. "My advice to clients is always to spread their investments, not put all their eggs in one basket - especially a single property," said Stephen Roberts, of Robson Lister Wealth Management.
We cannot predict our futures, but remember that your property is a valuable asset and be astute in how you utilise it. If you’ve hit retirement and need to sell your property, then Open Property Group can give you a cash offer in minutes and can work around your preferred moving date; making it easy and stress free.
If you would like to receive regular email updates containing news stories, case studies, reports and guides from Open Property Group, please provide your email below.
We buy property directly and you won't pay any agent's fees.