Retirement savings: Why buying a rental property before retirement may not pay - Mary Holm
Financial advisor Mary Holm discusses the risks and considerations for a couple nearing retirement who are debating between investing in a rental property or a balanced fund. She emphasizes that it is never too late to save but warns of the risks associated with property renovation and market volatility.
Why it matters
Provides practical financial guidance for aging populations concerned about retirement security and asset allocation.
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Q: My husband and I are both five years out from retirement.
We both work part-time (total joint salary $100,000). We have been lifelong travellers, students, renters and spenders on experiences, and came to saving late. We have no children or dependants.
We recently paid off the mortgage on our home, which is valued at $660,000, and have savings of $120,000 in the bank earning very little.
Having used most of our KiwiSaver money a few years ago to buy our first home (the house we have just paid off) our current KiwiSaver balance is just $70,000.
At this late stage, how can we grow our savings to supplement our NZ Super in retirement?
With the unstable state of the world, it seems risky to put the $120,000 into KiwiSaver so close to retirement.
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