RETIREMENT is sometimes defined as the point in life when we stop spending the majority of our time at work and begin living life.
Once our retirement celebration is over, most of us will spend more time staying at home. It will be natural for us to retire in a familiar area close to family, friends, church, neighbours, shopping and other amenities in the neighbourhood. Hence, our dwelling place becomes exceedingly important to us.
During the early stages of retirement, those who can afford to upkeep the house and even hire a maid to take care of it, may not be under financial pressure. But if your retirement savings are depleting year after year and you are not making enough money from investment portfolios, your house can become a financial burden.
Few of us can think objectively about retirement and old age. Any decision to move or to ‘stay-put’, even after a fall or a health problem would precipitate some trauma.
Having to leave a comfortable home and adjust to unfamiliar surroundings – especially when the choice is not ours is frightening. Uprooting would mean “taking away” our sense of belonging and an immediate isolation from family and friends.
There are initiatives overseas in providing appropriate housing for elderly people within community living – a form of ‘lifetime home’ without having it identified as “old-folks’ ghettoes”. In a survey amongst the “new elderly” in Denmark, high priority was given to good housing amenities and the ability to stay in one’s own home as long as possible.
As one poignant respondent commented in the survey: “It is important to move while you still can to a place you choose before other people move you to a place they choose.”
While we wait for such amenities to be available in Malaysia, it is important to be clear minded about our “age in-place” during the golden retirement years.
Choose our dwelling place with a conscious intention of simplifying our life, controlling maintenance costs to accommodate our ageing needs and minimising disruption to our living habits. Unless our adult children can take care of all these, it is safer for us to maintain them within our affordability.
It is wise for you to start thinking about it with the following considerations. Although they may not be comprehensive, they serve as a good guide:
a. Financial Considerations
·Housing loan obligation – housing loan period should not be stretched into your retirement. It can be financially stressful unless you have investment income to pay for it. Your retirement savings are best conserved for living expenses and not loan repayments.
·A loan-free house is a good idea if you plan to sell it in exchange for a cheaper retirement place. The extra cash from the sale will become useful for your ageing needs.
·Live in a house where cleaning and washing can to be kept at the minimum. You don’t want to be spending your retirement money, time and energy on upkeep instead of enjoying your retirement.
·Live in a house that requires low electricity consumption – energy saving lights and good air circulation can reduce lights and air conditioning. The extra money you save on electricity bills can be used to pay your groceries and important living expenses.
·Location of your house is important. One with affordable cost of living for groceries, shopping and eating out can help stretch your dollar. A place with public transport would provide the convenience, and savings on vehicle costs, petrol and parking fees. Remember that at some point in your retirement you might decide to stop driving.
b. Non-financial considerations like family and friends support, community living with leisure activities and availability of medical-assisted care. You wouldn’t want to be lonely and may prefer assisted-care at home or nearby places.
c. If you want to retire abroad, planning with lots of foresight, research and fact finding from people who have experienced retiring abroad is important. You won’t want to fall into the trap of not being able to afford it or find that you regret it because you miss your family and friends in your home country.
A comfortable house is a great source of happiness for your transition to “ageing in-place”.
If not planned properly, it could be an emotional and expensive affair for you and your family members. It is better to think through all possibilities now for a happy retirement dwelling place later!
BY Carol Yip who is a personal financial coach and also founder and CEO of Abacus for Money
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