Retirees Opting to Right-Size Are Reaping the Rewards

Retirees Opting to Right-Size Are Reaping the Rewards

The Financial Conduct Authority recently warned against over-relying on property to fund retirement. However, if you play you cards right, property investment is an excellent way to help fund your retirement.

In fact, over 10,000 over-50s have admitted that they would move if the new house were appropriate and a further 7 out of 10 revealed that they like the prospect of ‘rightsizing’ upon retirement. Minimalizing is an excellent way for preparing for retirement and one which will be of no inconvenience.

It’s no secret that the current economic climate is tough and that thanks to low interest rates, saving funds aren’t what they used to be. Thus it may be beneficial to sell your large property and pursue a smaller one; particularly so if you are now in an ‘empty nest’ and there’s no need for a large living space.

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Down, or rather ‘rightsizing’ is a great way to fund newer and smaller properties which will in time release money for investment projects.

Money earned from rightsizing and any potential investment projects will allow you to treat yourself to that holiday you’ve dreamed of all of your working life or even go and get that dream car. If you wish, you can spoil your children, or set-up a fund to help your grandchildren get to university or for them to go off travelling.

However, opposed to rightsizing, many retirees are now leaving the property ladder to become part of the 25% of retirees who rent. 42% of retired renters are former homeowners, with the majority deciding to do so because of financial reasons.

At 39%, well over a third had no choice but to sell their home in order to pay off debts, 19% needed the funds to cover the cost of a divorce, and a lesser 9% decided to rent so they could use the additional income to boost their retirement fund.

Renting also comes with a host of other benefits, as you aren’t really tied down there is the option to be able to move at short notice, whatever the reason. You or your partner may have to move into a nursing home or simply may just wish to be closer to family.

However, for retirees who have been homeowners for some time now, or even for those looking to step onto the property ladder, renting may not seem like an attractive choice.

There are many affordable new build properties which may be perfect for the retirees looking for a new home. You are eligible for affordable new housing if you cannot afford to rent or buy housing that is supplied by the private sector, though you must prove you have had a connection with the area for over five years.

The prices are deemed affordable as they tenants are typically charged between 40% and 60% of average rents in local areas. From 2014-2015, over 66,000 affordable properties were built and that number is continuing to grow. There are many property options for retirees looking to release funds, each with their own benefits, you simply must decide which suits you best.

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Retirees Opting to Right-Size Are Reaping the Rewards
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