Home sweet home

Finweek English Edition - - Front Page - NIC CRAIG

I READ Vic de Klerk’s re­sponse (18 Septem­ber: “Rent be­fore you re­tire”) to Tim El­liott’s ques­tion with in­ter­est. And while I don’t nec­es­sar­ily agree with his con­clu­sion, I whole­heart­edly agree with the gen­eral theme of his re­port – make sure your as­sets in re­tire­ment per­form ad­e­quately in or­der to achieve your fi­nan­cial ob­jec­tives.

In plan­ning for re­tire­ment you should al­ways work back from the fi­nan­cial out­comes that you want or need to achieve. What in­come must be gen­er­ated and how will that be ac­com­plished, rel­a­tive to the ex­penses that must be met in re­tire­ment? If the ben­e­fits and as­so­ci­ated costs of not sell­ing your home in re­tire­ment have been fac­tored into that equa­tion and the an­swer is still OK, then it might not be nec­es­sary to do so. Hav­ing said that, if the equa­tion isn’t giv­ing the de­sired out­come, you would then need to con­sider a range of other al­ter­na­tives.

I’m cer­tainly not sug­gest­ing that home eq­uity release is the per­fect so­lu­tion, nor am I sug­gest­ing it’s the only so­lu­tion. How­ever, it is one of many al­ter­na­tives that peo­ple are able to con­sider as a means of ac­cess­ing ad­di­tional cap­i­tal or in­come to meet their re­tire­ment needs or dreams, par­tic­u­larly if they wish to stay in their fam­ily homes dur­ing their golden years.

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