In this episode we look at the age group of those 55 and above. The issues that can affect this group and some ways to combat those problems whilst also looking at some strategies to use debt for your advantage,

Entering retirement, owning your own home and being completely debt free is for many people the great Australian dream. But with lifestyles changing and living expenses on the rise, it is not necessarily possibility for everyone, and many people enter this stage of life with a mortgage.

Some of the strategies to consider for those above 60 would be to get pro-active with their debt strategy in advance of retirement by understanding how you want your lending facilities to look for the rest of your life. This is important as your opportunities to restructure this become more limited as you get older and when retired.

If you are planning to carry out a home loan into retirement, it is important to know that it’s not necessarily an impossible thing to manage, but you need to plan for it as part of your household budget. You might be potentially learning to live off a lower income amount if you’re finishing up working full time and therefore the repayments need to be factored in because as a percentage they could be eating up more of your income and your lifestyle could be affected as a result.

Often the biggest asset that individuals have is the family home, and with property price increases over the last decade being so significant this effect has been compounded.

With such large amounts of our wealth tied up in non-income producing assets such as the family home, debt strategies will form a bigger part of retirement planning than ever before.

A family home is not income producing but provides a host of other benefits including peace of mind, a sense of financial security and a place to call home without the fear of getting told by your landlord that you need to move. Whilst they are great benefits, it doesn’t assist in funding your lifestyle. Short of renting out a room, charging board, or perhaps listing on Airbnb, the family home is not going to generate any income that's going to help fund your lifestyle needs in retirement and options for accessing the equity in the home may be required to meet this.

Care needs to be taken because this is an asset that often has a deep emotional connection, so you want to make sure that you are not putting this at risk by overextending and not being able to meet repayments. But, if used correctly, you could be accessing just a part of the equity and the ongoing growth in the property to supplement your lifestyle whilst still being able to remain in a property that you're comfortable in and feels like home.

Episode 58 - Property Discussion with Dave Robbins

The Wealth CollectiveBy The Wealth Collective Podcast Jan 16, 2020