28 November 2022
Choosing where to live during retirement.
My broad rule of thumb is for when people first retire, in their mid-60s, they should have up to half the value of their home available as a liquid (able to be freed up easily) investment portfolio. That is a good amount to aim for if you want a comfortable retirement. However, the amount of free cash you need depends very much on what you plan to do in your retirement and what your health and other lifestyle needs are.
The leftover amount, following the sale of the family home, can be used strategically over your retirement. Some can be set aside to generate a fortnightly income to top up NZ Superannuation or to pay retirement village levies. The remainder can be invested in short, medium and long-term portfolios to provide for lump sum spending.
In considering your retirement living options, your needs and your choice of the kind of lifestyle you want should really come before financial considerations. In other words, your chosen option doesn’t need to be the lowest cost option or provide the best value for money. It needs to give you the best lifestyle that is within your available resources.