Silent Housing Crisis

There’s a silent housing crisis developing, but it’s not the one that’s making the headlines.

There is an increasing number of Kiwis retiring who either do not own their own home or they will retire with a mortgage. Either way they will struggle to pay the mortgage or rent from their retirement income. Five years ago, 80% of Kiwis retired mortgage free, now it’s down to 70%.

Whilst the actual number of retirees renting is not known, as of June last year 40,000 (5.4%) of retirees received the accommodation supplement which is double that of 2010.

Home ownership is culturally valued in New Zealand, but the ability of any person to own a home is rapidly decreasing. People who don't own a home are in greater danger of poor mental health in retirement. A person's long-term health and social well being is related to the quality of their housing as they age.

I am aware of retirement villages that are starting to develop units specially to be rented out, rather than purchased. There is a growing risk that we will see more and more older people living in housing related poverty.

How can this be avoided?

Ask anyone who’s retired and they will say to start saving for retirement as soon as you can! Even if it seems a long way off, it pays to start planning for retirement as early as possible. How much you will need will depend on your own circumstances. While NZ Super can help us get by, it’s our own savings that will help make retirement fun and comfortable.

It never too late to start, the sooner we start, the better the position we’ll be in when we eventually stop working. Over the last few years I have worked with a number of clients of all ages to help them with their retirement goals using a variety of techniques. If you would like help to develop your plan please do not hesitate to contact me.