PLAN NOW FOR RETIREMENT
Category Property Ownership
With interest rates at an all-time low, a lot of attention has been given to the First-time Buyer to make use of this opportunity to get a foot in the property market. On the flip side of the coin, however, there are those people who are approaching retirement who opted to put their money in various savings plan options to provide for their old age, that feel the devastating effects of a low interest rate. Irrespective of under which category one falls, planning for a comfortable retirement is essential at an early stage in one's life.
The mere thought that a time will come when one is not so strong, agile, and quick thinking is so scary for most people that "retirement" is blocked out of one's thoughts altogether. The fact is that you will need to consider your retirement living options much earlier than you think.
People often believe that the home where they always lived and raised their children will be the home where they will retire and continue living in 'forever'. Unfortunately, this home often becomes a burden to the retiree as maintenance and the mere size of it turns out to be an encumbrance. Parents often hold onto the family home with the good intention of leaving it to their children. It is best to discuss this openly with them as they might not want it, but rather see that you live comfortably in a place where there are other people of your age and that you can have a good time, instead of guarding the old family home.
You can sell your home and downscale to a smaller place or choose to live in a retirement village. Today there are many more options than the traditional Old-Age Home. You should take your financial position into account and thoroughly investigate your options in the areas of your choice.
The location is often the most critical part of the decision as you consider it to be important to be close to family and your children. Rather discuss this with them first because they might have visions of moving elsewhere or even immigrating. Many people dream of retiring at a seaside town or a small inland village. It is prudent to check out the nearby amenities and access to healthcare in the vicinity. Is the area safe and will you feel at ease and secure living there?
Available facilities of your intended retirement place are crucial because it is unlikely that you would feel like tackling a major move again later in life. Are the bedrooms and bathrooms spacious and the home wheelchair-friendly and north-facing? Find out if leisure activities, such as craft groups and social events, are offered. If you opt for a retirement village, check out the services offered, medical facilities, and frail care.
Consider the costs of moving and buying. Buying in a retirement estate can come with a hefty price tag. The monthly levy /homeowners fee payments can be exorbitant and the selling and letting charges quite prohibitive. The price for a small but comfortable place in a retirement village can be as little as R1,6 million, and can easily soar to R5,5 million for a home in more exclusive estates. Attaining a mortgage bond after the age of 60 is challenging, and close to impossible. For all these reasons and more, careful retirement planning at an early age is imperative.
You might not be a first-time buyer, but the low interest rate can serve you well in investing in a second property that will serve you well when the time comes to scale down or convert into capital to buy a suitable place to call 'home' in your golden age.
Author: Adrie Barnard
