New Challenges For Retirees In Post COVID New Zealand
Retirement savings are taking a back seat for many
Many New Zealanders are retiring without the funds they need to support the lifestyle they want to live. In the post COVID-19 environment, this trend is expected to continue.
It’s no surprise that the latest Massey University retirement expenditure report found that most New Zealanders aspire to a better standard of living in retirement than can be supported by NZ Superannuation alone.
The post-COVID-19 environment
The retirement expenditure report stated that “the current low interest rate environment is challenging for retirees”. Interest rates have reduced further since this report was published and COVID-19 has presented new challenges for some retirees or those considering retirement.
For those facing redundancy or salary cuts, saving for retirement has become a lower priority. For many, the focus has shifted to making ends meet on a day-to-day basis, with retirement savings taking a back seat. In addition, more retirees are looking for ways to support younger family members who have been affected by the current economic situation.
While uncertainty around the housing market may deter retirees from selling their home in the short-to-medium term, lockdown showed just how valuable our homes are – in much more than a financial sense. Our homes kept us safe and enabled us to maintain a community connection. This is backed by Stats NZ research which found that homeowners report better health and are happier. Those cautious or unwilling to sell their home to downsize may now be looking for other options to fund their retirement.
Home ownership helps
The value of residential real estate in New Zealand is $1.2 trillion, far outweighing the value of the New Zealand share market or KiwiSaver funds. For the 77% of people over 65 who own their own home (according to a 2017 report) a reverse mortgage could provide access to much needed funds for Kiwis in retirement.
A solution for a more comfortable retirement
The high rate of home ownership and proven benefits provide an opportunity for retirees to live a more comfortable retirement by releasing some of the equity held in their property through a reverse mortgage.
New Zealand’s leading reverse mortgage provider, Heartland Bank, has seen enquiries bounce back to pre-COVID-19 levels as Kiwis over 60 look for solutions to help complete home improvements, consolidate debt, support their family or just take the stress out of everyday bills.
Heartland Bank is proud to be able to provide an option to help New Zealanders live a comfortable retirement despite the uncertainties that the post-COVID-19 environment brings.
For more information about a Heartland Bank Reverse Mortgage, go to www.heartland.co.nz/reverse-motrgage.
Heartland Bank’s lending criteria, fees and charges apply.