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What to consider after retirement
He says renting for a while is probably also a good idea if you are "between homes", that is, not sure where you want to settle in retirement.
"However, there are also disadvantages – the big one being the uncertainty about how much rentals will rise in future, and how you will continue to make these monthly payments, especially if you're on a fixed income that is being steadily eroded by inflation.
"If you have children, you may also worry that renting is just eating up their inheritance."
So, says Everitt, a better option for many people is to buy a sectional title unit in a secure complex, especially if you can use the proceeds of your home sale and buy the unit outright.
"In such complexes, there is a monthly levy to pay, but it gives you much the same freedom from maintenance chores as rent – and you have an appreciating asset to show for your trouble."
Looking ahead, however, you may wish to combine your current residence with planning for possible health-care needs in the future, in which case you should be looking to buy a home in a retirement village with its own assisted-living and frail care facilities.
"Here, too, you will be paying a monthly levy but the trade-off will not only be in home and garden maintenance but in peace of mind about what will happen to you if you become ill or too frail to manage your own home.
"Well-run retirement complexes will usually also have a levy stabilisation fund to help keep a lid on future increases - and once again, you will have an asset to leave to your heirs."
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Posted on Thursday, November 29, 2007 (Archive on Monday, December 31, 2007)
Posted by hayleym Contributed by hayleym
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