Many New Zealanders enter retirement in a position that can seem contradictory. They may own valuable assets, particularly their home, yet still find themselves short on regular cash flow. In “Asset rich, cash poor: tackling the retirement puzzle,” Lifetime Retirement Income explains why this situation is becoming increasingly common as housing wealth grows while everyday living costs continue to rise.
Lifetime explores how retirees can think differently about their assets and the role those assets might play in supporting income later in life. From understanding the value tied up in property to considering ways that wealth can be converted into usable income, the article highlights the importance of planning ahead and ensuring your assets are working for you throughout retirement.
You can read the original article here: Asset-rich, cash-poor: tackling the retirement puzzle.
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For generations, New Zealand has preached one gospel above all others: get on the property ladder. We've dutifully followed this mantra for decades, building wealth brick by brick.
The numbers tell an impressive story - over the next 30 years, an estimated $1.6 trillion will transfer from baby boomers to millennials, with residential property forming the lion's share of this generational windfall.
Yet here's the uncomfortable truth: despite sitting on this mountain of wealth, many of our retirees aren't living the retirement dream they worked so hard to achieve.
The problem is elegantly simple. We've created a nation of people who are asset-rich but cash-poor-wealthy on paper yet struggling to meet everyday expenses. It's the financial equivalent of being ‘all dressed up with nowhere to go’.
Today's retirees may own valuable homes, but they can't pull a brick from the foundation to pay the rates bill or cover rising living costs.
Ralph Stewart, founder and managing director of Lifetime Retirement Income, sees this tension every day.
“It’s frustrating to watch hard-working Kiwis who are sitting on hundreds of thousands of dollars in home equity, struggling to cover the basics and enjoy their retirement as they deserve,” he says. “Lifetime Home is our solution to that.”
With reverse mortgages, there's a gnawing unknown: how much equity will remain after years of compounding interest? Lifetime Home removes that uncertainty.
"We wanted a solution where homeowners - and their families - know exactly what portion of equity they would retain, no matter how long they thrived in the home," Stewart explains. "Certainty matters when you're planning your retirement."
No one wants to watch parents who own valuable homes struggle financially, especially after believing they'd set themselves up well. Lifetime Home offers something simple: peace of mind for both generations.
For many families, that certainty can become the deciding factor.
“You can’t put a price on certainty, especially as you get older and can start to feel more vulnerable,” Stewart says. “It’s one of the things that is particularly valued about Lifetime Home, by retirees and their families.”
“We need to provide ways for people to turn their savings into stable incomes that help them create the retirement they deserve – even when those savings are locked up in bricks and mortar. We think Lifetime Home is the key to that,” Stewart says.
If you or someone you care about owns a mortgage-free home but feels financial pressure week to week, it may be time to consider whether unlocking some of that home value is the most logical - and empowering - next step.
Have you thought about Lifetime Retirement Income to look after your money in retirement?
They know that people spending in retirement require significantly different strategies to those who are saving for retirement. They manage retirees money a little differently to people who are saving for retirement. The reason for that is we have to make sure retirees savings last.
So click on the button below and take a couple of minutes to read all about them.