Many New Zealanders think “downsizing” means packing boxes and moving house. But what if it didn’t?
The following article, written by the team at Lifetime Retirement Income, explores practical ways retirees can unlock value from their home without necessarily having to relocate. It’s a thoughtful look at the different options available and the considerations that come with them.
You can read the original article here: How to ‘downsize’ without going anywhere.
Or you can read the article published in full below and tell us what you think in the comments section.
Home and the community around it may be where your heart is, but it’s often where all the cash is too, making it hard to fund your retirement dreams without selling up.
Moving out and ‘downsizing’ has been a key plank in many Kiwis’ retirement plans for years. But after spending years building a life and a community, the idea of being wrenched away from that can be heartbreaking.
What’s more, estate agency fees, moving costs and the tweaks you need to make to the new home can quickly eat a hole in the money downsizing might free up. And moving into popular retirement areas often doesn’t come cheap either.
But there is another way, Lifetime Home is like ‘downsizing’ without leaving the home and community you love
“By the time I paid for a new place and the costs of moving, I’d be no better off. And I love my home. It’s where I feel happiest,”
Judith’s experience is common. Many retirees want to stay in the home and community they’ve built their lives around. But they also need extra income to cover everyday costs or to enjoy a few luxuries after decades of work.
“Your home is more than four walls and a roof,” “It’s where you’ve built your life, where your friends live nearby, and where you feel most comfortable. Why should people have to give that up just to get some financial breathing room to be comfortable in retirement?”
- Ralph Stewart, Lifetime Income Retirement Managing Director
Lifetime Home means there is a new alternative to moving out, or severely pruning back your retirement dreams. Lifetime Home enables retirees to release the capital built up in their home to spend in retirement - without being uprooted from their home and community. The ‘downsize’ is not in your home, but in the equity held within it.
It works by allowing homeowners aged 70 and over to sell a portion of the equity held in their home at a discount, in exchange for regular fortnightly payments over 10 years.
Unlike reverse mortgages, (Read our article: Lifetime Home is not a reverse mortgage. Here’s why), there’s no loan and no debt, so no compounding interest to worry about. Just a predictable stream of payments that can supplement NZ Super.
Homeowners know from the start just how much of their property they’ll keep at the end of the agreement (normally 65%). They can then live in the home for as long as they like.
Stewart says
“It’s about dignity and independence,” . We want to help people to live well, in the home they love, without the pressure of taking on debt or being forced to sell and move.”
Costs like rates, healthcare, or help around the home can be hard to fund on NZ Super alone, which is why Lifetime Home is so helpful. While for some the extra cash it provides each fortnight means a more comfortable retirement, for others it’s a path to aging in place, when that place is in the community you love.
Ageing in place and living independently in your own home and community for as long as possible is something most Kiwis aspire to. It’s also a policy goal for New Zealand’s health system, given the social and wellbeing benefits of keeping older people connected and comfortable in their communities.
Remaining in one's own home and community, offers significant benefits:
Better health outcomes: Familiarity with surroundings reduces stress and supports mental wellbeing
Maintained social networks: Staying connected with established friends and community reduces isolation
Greater independence: Knowing your neighbourhood and having established support systems
Emotional security: The comfort and memories associated with a long-term home
Community contribution: Continuing to participate in local activities and volunteer work
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.