A Comfortable Retirement

Date published: May 22, 2013 at 9:52 am | Comments

Many people in retirement today are not very well off. Some approaching retirement, are financially ill-prepared. Reasons for this are varied, but many potential retirees have, by necessity, needed to live in cities where they work, paying especially high property and mortgage costs. Indeed some couples are still paying off their home when they retire. There are also the unfortunate ones who have been made redundant in their later work years when saving for retirement and, although they may have paid off a valuable property, have not had the opportunity to put much capital aside. Of course, others have also lost in the financial markets through no fault of their own.

Many New Zealanders have been led to believe that their house is an investment when in reality it’s really just an asset, and a cash-consuming asset at that. Mortgage interest over 25- 30 years practically doubles the amount you pay for your house. If your mortgage is $300,000 over 30 years the total you will repay for your home is approx $600,000. It may be a little less or a little more depending on the term of the mortgage and the interest rate, or a high-priced area where you work, so you don’t have many options so, you will have paid a lot of money to the bank.

Retirement costs money, especially if you want a reasonable standard of living. Many people have all their capital tied up in a large home or property. They are asset rich but cash poor. They may have paid off a hefty mortgage and have an expensive home but little actual cash for a retirement nest egg. Some will also find that if they try to sell that expensive home to trade down to a smaller and more manageable home in the same area, they cannot realise what they think the property is worth. Take a look at provincial New Zealand towns, like Kawerau.

Property prices are relatively cheap and provide a smart financial alternative. The weather, lifestyle, people, resources and close proximity to major centres makes Kawerau superior to many other retirement options. With all these benefits, the property prices are the icing on the cake.

A retiree with a lot of money tied up in an expensive home but only a couple of hundred thousand dollars to retire on, needs to consider avoiding being caught in that trap. Buying a home in Kawerau with its low costs can reverse that situation, leaving plenty of capital to make changes to suit your lifestyle, and still leave plenty for travel and any special future health care needs. Recently, a chap from Tauranga came to Kawerau for a look and decided buy and retire here. He sold his home in Tauranga for approximately $500,000 and bought a similar home in Kawerau for $180,000. After spending $20,000 on it in renovations, he had $300,000 left over to go to his retirement fund. But the story does not end here. His old neighbour came to visit him and was so impressed by the place and the deal, he also sold up and shifted to Kawerau to retire with similar results.

Money to live on, and not money tied up in a house that you can’t use, is what makes for a comfortable stress-free retirement. Do yourself a favour. Come and look at what we have here in Kawerau. Use your imagination if it needs a make-over and you could have the property you desire in the town known as the Gem of the Eastern Bay of Plenty. Although houses in Kawerau are inexpensive and reasonably-priced at the moment, they can’t always stay like this. The shift to being a sought-after retirement town is taking place, and attracts people with some means, because of the lifestyle and climate.

Source: Kawerau Online - Contributed by KEA