Straight talk on retirement housing: things you need to know

And, Janine writes "Help! What can I do if I don't own a home?"

In this edition

• Feature article: Straight talk on retirement housing: things you need to know

• Your letters: Help! What can I do if I don’t own a home?

• From Bec’s Desk (including Prime Time update)

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Straight talk on retirement housing: things you need to know

Where you live, how much it costs you, and what you need from your home as you head into retirement, and in the years after are a big conversation. And some parts raise points some people don't want to hear. So today I’m tackling it head on. And I’m probably not going to tell you what you want to hear. But I might give you a few useful things to think about. 

Choosing the perfect place to retire is a deeply personal decision, one that requires careful consideration of a long list of things. Today I’m going to give you my list of things to think about when you contemplate moving house at any stage in pre-retirement or retirement, knowing you might want to live in your next house right through the latter part of your life - and that requires you to think strategically. Let’s dive in. It’s a big list.

Affordability

Let's talk money. Ideally, you want to own your home debt-free in retirement. Debt and retirement don't make good buddies.

I have received several letters from people living in the cities complaining about mortgage stress and how it is limiting their ability to retire. And the only thing I can say is maybe, if they can’t afford to live there, and they don’t want to keep working to pay the debt, these people should consider moving to somewhere more affordable.

So, look around and figure out where you can afford to live without drowning in mortgage stress. It might mean packing up and heading to a more budget-friendly spot. Yeah, leaving your roots can be tough, but sometimes you simply have to make those hard calls.

Features for YOU

Now, think about what you want. This is your time to shine, or even to enjoy some new ways of living. Maybe you want less yard, more yard, a veggie patch, or a downsized cozy spot. Maybe you want to downsize or maybe you want a lifestyle home. There's no right answer—just your answer. Oh, and don't forget to test the waters before you jump in. Mistakes can cost you $50,000 to $100,000 in agent commissions and stamp duties.

Future proof your space

If you plan on growing old in your new home, think ahead. Stairs might become Everest, and slippery baths are not an ageing retiree's best friend. But they can all be managed if you have a plan so take a long hard look at the property and consider how you can adapt it to age well. Also, think about where guests can crash, especially if you're moving away from your city-dwelling family and friends.

Think about the central costs

Every type of housing has trade-offs in annual or shared costs. Standalone houses require regular maintenance and improvements, apartments require you to pay a sizeable body corporate fee each year and sometimes stump up to repair an ageing building, and retirement communities usually have a management fee you need to be prepared for. Make sure you think about these, and how they will increase with inflation. And consider how these will play out of your retirement budget.

Consider the cost of living

You might want to move out of the city for a discount on housing, but you might be surprised in some places by the costs of food, fuel, and household goods. One of our Epic Retirees moved to Darwin in retirement for the lifestyle but he’s very keen to point out that in Darwin he pays more than 20% more for food and household items.

Check the weather - in all the seasons

My mum moved last year to a small town in central Queensland. She moved in the winter, when it was dry and pretty and she planted up a beautiful veggie garden that thrives on hard work and attention. Fast forward to the third month of Summer and she’s not so impressed. It’s stinking hot, so she’s spending from 10-3 indoors with the air conditioning cranked and tends to her very thirsty veggie patch at daybreak and twilight now. That’s something she had not considered.

Look for healthcare nearby

As you age, you’ll need to tackle more ailments more often. So you’ll want to think about how far you have to travel when you need healthcare. Not everyone can live down the road from the best hospitals when they get older. There has to be some tradeoffs so instead consider the health services you want to have available locally, and which ones you are willing to travel for. Consider the availability of a good GP in your local area. Where might you be able to access allied health services you need like optometrist, physiotherapist, chiropractic and podiatry? And where the closest major hospital is if you have a significant health issue.

Assess airport access

For some, this is critical, while for others, paying more for air travel to bunny hop to your closest airport might be a healthy tradeoff for a lower cost of living, especially if flying is a special event. 

Homecare and aged care needs

If you plan to age in the town you’re moving to, you’ll want to make sure there are services that support you in doing so. And in that there’s two things to consider. The first is whether there are satisfactory home care services available in your area? And the second thing to consider is whether there are any aged care facilities in the area if you want to stay in that region as you head into your frailer years. 

Think about transport options

It’s increasingly recognised that people will drive less as they age but still look for ways to stay out and about. Think about this when you consider where you’ll live.

High rise or medium density villages in towns with amenities that are in walking distance are all the rage for ageing populations. For some the goal is to rarely have to get in the car to do daily or weekly errands. Sounds good to me. 

Stay social

Friends, passions and interests are important. So make sure you have a strategy on where you’ll tap into each. What clubs, organisations and epic pursuits will you take part in in your new location? Have you checked on what’s there to replace things you currently appreciate? 

Consider your family and friends

It is really important to consider your relationships with family and friends. Even if you're intentionally relocating away from them, take a moment to ponder a few things: 

• Is your move is intended to bring you closer to your family? If not, think about how you’ll maintain connections. Will frequent visits be feasible? Is this a priority for you?

• Contemplate the strategies you'll put in place to stay in touch with your loved ones. Reflect on whether they will visit you and how important and affordable it is to you to visit them. 

• Think about how you'll forge new friendships in your new home, if you are moving away too. 

Look for your home essentials

And finally, consider the fun things you’d consider at any age. Think about how important it is to be near a beach or a rainforest, or to have a flat and safe walking path nearby. Consider the sporting clubs you would want to access - ie golf club, surf club, bowls club and the gyms and health club facilities you might want to access - for exercise. Look around at the entertainment options like access to arts, culture, music concerts, comedy and such. And consider your ability attend footy games or other sports that bring you joy. 

HELP! I don’t own a home

“I only recently discovered your book and podcast. Thank you for opening my eyes to the reality of the future. I’m 53 and have been living life very differently to most. Some may say I’ve had my head in the sand but I have always followed my heart. Until now …I’m freaking out about my future! It’s all so overwhelming…

I never subscribed to the work hard then retire approach. I decided at a young age I wanted to discover my true purpose and I’d never need to retire. Yes, a dreamer. So now I find myself feeling discombobulated.

I’m single, never married and no children. I’ve spent my life exploring my passions and travelling the world. I’ve had a fulfilling eclectic career that’s kept me working and earning.

I’ve loved many times, lost a few loved ones and struggled with the life roller coaster like all humans. I’m reasonably healthy but menopause has affected me as well as a few minor challenges that I’m working on. I do take my health seriously. 

Whilst I’ve made some terrible financial decisions, I always pay my bills and have a comfortable rental home. I have a supportive family and great friends - feeling very blessed.

I don’t own a home. I know that’s important for my epic retirement so I know I need to do something about this but yikes the climate is challenging and can I get a mortgage?

 I’ve spoken to a broker who suggests a regional investment instead of buying in the inner city of Melbourne where I love to live. Not only tax benefits for an investment but no body corporate fees. I have no car so I ride my bike and catch PT - even with my little dog! It’s a great lifestyle and I’d love to buy here in inner Melbourne but it’s so expensive!

I’ve spoken to my parents and they MAY be a guarantor for a home loan. This is dependent on whether the bank will loan to me based on my contract work style of career. Hence I'm focusing on saving - no holiday this year.

I’m not asking financial advice as I have access to financial advisors but I wanted to hear your thoughts. 

My question is can you PLEASE share some ideas for epic retirement options for those of us who don’t have properties as I’m sure I’m one of many.

I’m ready to create a robust plan for my future. “

Janine, 53

Thanks so much for your note! It sounds like you are getting some sensible insights from your adviser. Your passion is terrific! And I’m sure if you apply that level of passion to preparing for your retirement that you’ll reap the rewards. 

One of the fundamental rules of retiring in comfort is that you really should own your own home outright - chiefly because this brings your cost of living down as you don’t have to pay rent. But I’ve had a lot of letters in recent weeks from people who simply don’t own their own home, or feel they have too large a mortgage for the stage of life they are heading into. So I’ve written a longer list of insights into the things anyone can do in this position.

I also point out that there is a limit to the ways that you can fix this situation. Instead, you might just have to ‘make the best of it’, and make choices to live as comfortably as you can afford or change where you live - advice that some people don’t like to hear. You can still have an epic retirement if you crunch your budget and live within your means, saving little excesses for good times and finding joy in your passions (so long as your passions aren’t luxury cars and luxury holidays).

Remember, everything I say is general advice. It may not suit your situation so get some personal advice from a qualified adviser. Let’s dive in.

Crunch the numbers on home ownership

See if you can manage to buy a home with some of your superannuation or savings. Getting off the rent train can be great, but only if it won't break the bank. Some folks use their superannuation money, an inheritance or savings wisely to buy a place later in life. Others are stuck renting forever without these options.

Have a chat with a financial adviser to figure out how much your super or investments could bring in over the years if you invest them for income or compound growth, versus how much you could save on housing if you buy a house. It's a personal decision, so get advice that fits your own situation.

Properly consider your relationship with debt

Debt is not something you want to have hanging around your neck in retirement, unless you have the regular income to pay it down. Work out how long you realistically have to pay off a mortgage before you want to be retiring from work, and make sensible, not idealistic, decisions if you are thinking about buying a home in your 50s. Banks aren't naive—they won't give you a 30-year mortgage at 53 and expect you to work till you're 83. So, you'll have to play by their rules.

Really do contemplate going regional

Whether you're renting forever or looking to buy on a tight budget, think about heading to a less pricey location. Our capital cities and fancy beach towns are getting crazily expensive. If you don't need to be in the city for work anymore, why not check out somewhere more affordable? Second tier cities and regional areas are often much less expensive, and there’s also quite a bit of work out in the regions going spare. 

Understand your pension eligibility and whether you’ll qualify for rent assistance

If you're stuck renting and can't buy before retiring, at least understand your pension eligibility. Turning 67 and retiring might allow you to get the full or part-age pension and enable you to qualify for rent assistance. The government might chip in up to 40% of your rent if you play your cards right. And you can layer in some income from your super, and work part time to make your retirement years more comfortable than they would be otherwise.

And think about renting out a room

If you do end up with a mortgage, or paying higher rent than you’d like, one way to speed up repayments is to find a roommate who you can share the costs with. Someone who will pay you rent. There’s lots of people in the second half of life looking for a likeminded roommate to share that ugly cost of housing.

So, there you have it—some down-to-earth ideas for tackling the whole retirement housing puzzle. It's not one-size-fits-all, and it certainly isn't all easy-to-digest so take these suggestions, get advice, and figure out what works best for you. I hope it helps.

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I am absolutely loving your letters.

We’re going to start including them in every newsletter and every podcast - wherever we can! So write to me! Tell me your thoughts, your issues, your requests. Ask a question you think others want to know the answer of too. Email them to bec@epicretirement.com.au. I’m listening.

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Now for shameless publishing of my favourite fan mail this week….

“I have your book, and after several chapters into it, I conclude that it's exactly what I've been searching for. It's been a game changer for me. I'm really starting to understand the factors to consider in the lead-up to retirement ... and the more I read, the more confident I become.  Your book is such a treasure,  and released me from the pre-retirement brain-fog.  I love it, and can't wait to leap into the next chapters! “ Georgina 

Awww shucks! Thanks Georgina 😊

Well hello! Big news in my world. My oldest daughter is not coming home from her summer working holiday abroad. She’s staying in Canada. That means I’m adjusting. This is my first child-leaving-home experience. And im still reassuring myself that she’ll be back soon enough, more grown up and more worldly. I’m not ready for my nest to start emptying yet.

Other than that, there’s not much new to talk about this week. We’re in build-mode. I’m actively working on bringing you good pre-retirement education sooner rather than later whether that be through masterclasses or courses, or both.

I’m also working on my speech to give at major events and in workplace lunch and learns too. Rather fun to craft and perfect one awesome keynote on How to have an Epic Retirement.

This week the Prime Time podcast is continuing it’s break, getting ready for the launch of season two. It’s almost ready to set free! As I mentioned on Sunday, our fabulous podcast got to #125 on Apple’s tops shows in the last episode - so it’s worth a listen - see all the episodes here. Here’s some of the most popular shows:

• How an entire generation cracked the game of life, working longer but stressing less: With demographer Bernard Salt - LISTEN HERE - It’s a cracker!

• How much money do you REALLY need to retire? And making sense of your super LISTEN HERE

• Exercise for longevity: How muscle mass improves your lifespan with Jonathan Freeman LISTEN HERE

And the Epic Retirement Flagship Course is almost ready to launch. So fill out our expression of interest if you’d like to attend the first program and I’ll send you more info when it launches. It’s a five week education program with so much to offer.

And that’s it for this week. Have a lovely weekend!

Make it epic!

Many thanks! Bec Wilson

Author, podcast host, columnist, retirement educator, and guest speaker