Retirees need to plan ahead to make sure they end up with the enough time and money to enjoy their retirement. It’s important to not to waste your time, so you can spend time enjoying your retirement. Creating a retirement plan is a smart way to reduce the risk of your retirement funds running out before you do.
Start early
The earlier you start thinking about your retirement, the more choices you will have. Begin by sorting out your finances and assessing the worth of your assets and super. Will you be eligible for the pension? What are your current sources of income? How will these change once you retire?
Plan ahead
Next, start on a long-term financial plan. Include all the things you will need to spend money on in the future, such as travel, your home, car and hobbies. The more detail your plan has, such as expected expenditure for Christmas, house repairs or weddings, the better. Then try to work out how you will use your different income streams to pay for these things.
If you don’t know where to start, or are confused by all the information, a financial advisor will guide you through your different options, explain the risks and benefits of different strategies, and help you come to an informed decision that best suits your goals.
Grow your income
Finally, look for ways to grow your retirement income. Simple strategies, such as curbing spending, working for a few more years and making sure you access all of your entitlements, can really increase your cashflow and make your money go further.
Growth strategies
ASIC’s Money Smart website suggests investing a portion of your money in assets that grow over time, such as shares and property.
While some people relish the complexity and challenge of learning about the stock and property markets, it can be overwhelming for others, especially at a time in their lives when they want to step back and relax. Many people have lost faith in shares as a reliable investment option post-GFC, and the property market can seem risky: while people may like the tangibility of property, they may not be confident in knowing what or where to buy for the best financial return.
However, there are options for retirees wanting to enter the property market who would prefer not to do the legwork of research, open houses, dealing with agents and managing tenants.
Serviced apartment investments for retirees
There are a number of benefits for retirees of investing in serviced apartments. The main one is cashflow: investing in a serviced apartment guarantees the investor a certain amount of income, on a regular basis.
When you buy a serviced apartment, you essentially enter into a long-term lease with the managing body, who then lets out the apartment for short-term stays, like a hotel. The managing body takes care of all the management and day to day maintenance of the apartment, so the investor has little or no involvement.
There are no management or letting fees and rents are paid direct, which means a higher net return to the investor. Plus, rents are paid whether or not the apartment is actually occupied. Because the lease is with the management company, as far as the investor is concerned the property is always tenanted, ensuring a regular rental payment 365 days per year. Depending on the lease, some leases also provide for the tenant to pay a portion of the owner’s outgoings like Owner’s Corporation administration fees for example.
Quest Serviced Apartments
Quest has over 150 serviced apartment complexes across Australia and New Zealand, and manages more than 5000 apartments for private investors. Quest also offer investors fixed annual rental increases and five-yearly market rent reviews, making Quest a great choice for retirees looking for a more steady, predictable and reliable property investment option. Find out more information about Quest Properties .
Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
