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After a lifetime of working, you may want nothing more than to live a comfortable life during your retirement. Unfortunately, this can’t always be the case. It was recently revealed that in order for you to enjoy a comfortable retirement that includes luxuries such as heading away on holidays abroad, a clothing allowance and a car, you’ll need to have saved up enough for a £33,000 a year income.
According to the research, if you only manage to save enough for £10,200 a year (£15,700 for couples), you’ll achieve a minimum standard of living, whereas if you manage to save enough for an income that provides you with £20,200 a year (£29,100 for couples), you will be able to live a moderate lifestyle during retirement.
But, if you’re struggling to reach those financial goals, what other ways could you explore that would help you to live a comfortable life during your retirement years.
How can I use my house towards a comfortable retirement?
There are a number of ways that you could use your property wealth to help you as you settle down to retire. If you’re reaching this time of your life or are already there, it’s worth speaking to a business that specialises in equity release or financial planning. They’ll be able to explore what options are available to you and which works best. Here are a couple of ways that you could use your home towards a comfortable retirement.
Downsizing
If you’ve paid off your mortgage or have a lot of equity in your home, selling up and moving somewhere smaller or cheaper can release a large sum of money. Whether you have children who have grown up and moved out or your home is starting to feel a little big, this is a great solution.
You’ll need to understand your retirement finances and the lifestyle you want to lead. This will help you to work out how much you’re able to spend on a new home. You will also need to factor in the cost of moving, as it’s easy to underestimate how much this will be! It’s not just about how much the property costs, but the estate agent fees, legal fees, stamp duty and moving costs too.
Equity release
Releasing equity is a way for over 55s to access money that’s tied up in the value of your home, all without moving somewhere else. The most popular type of equity release is a lifetime mortgage. This is a loan that’s taken out against the value of your home, and is only repaid when you go into long term care or you pass away.
If you don’t want to leave your house but still want access to funds, this is a great solution. Speak to an equity release expert if it sounds like an option you want to explore. You’re not able to release equity until you’ll received advice anyway.
Will Hale, CEO at Key, said: “Property wealth is established as a major factor in retirement planning with one in three people retiring this year looking to the money invested in their home as a way of supplementing their income.”
“With people retiring this year owning homes worth an average of £388,900 and total property wealth of £142 billion there clearly is a lot of wealth that could be used in retirement. Many will not need to use their home as part of retirement planning, but it is worrying if people are not taking property wealth into consideration due to a lack of awareness of the options available to them or as a result of myths or misconceptions about products.”
No matter which way you do it, it’s easy to make your home work for you financially to give you a boost in retirement.