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With our house being a biggest asset (apart from our ability to earn), it is an important part of our financial strategy.  This week we look at using KiwiSaver 'second chance' facilities to buy your first home, and the costs of home maintenance in retirement.

1. KiwiSaver 'second chance' first home buyer rules
2. How much do you need to spend on home maintenance in retirement?
3. Preferred News Sources Around the World

KiwiSaver 'second chance' first home buyer rules

 unique feature of NZ's Retirement savings scheme KiwiSaver is that KiwiSaver members can withdraw their funds to put towards the purchase of their first home.  If this is your first home, then the process is quite straightforward, with some additional features if you are building a home.  footer-kiwisaver77.gif

However, the rules also allow for 'second chance' house purchasers to access their KiwiSaver funds towards a house purchase.  Unfortunately the rules are not as straightforward.

The official Housing New Zealand website states that for 'KiwiSaver first-home withdrawal for previous house owners' this is the eligibility checklist:

Run through the checklist below to see if you qualify:

  • I have not received the first-home withdrawal before.
  • I have been a member of KiwiSaver for at least three years.
  • I have previously owned a home, but no longer have an interest/share in a property.
  • I do not have realisable assets totalling more than 20 percent of the house price cap for the area I am buying in. Realisable assets are belongings that you can sell to help buy a home. For example, if you were buying a home in the $350,000 house price cap area, your realisable assets cannot be worth more than $70,000. Housing New Zealand considers the following to be realisable assets:
    • Money in bank accounts (including fixed and term deposits)

Read more here.

How much do you need to spend on home maintenance in retirement?

When you are working and earning a good income, you are able to keep up with the maintenance requirements of your home.  However, when you retire and are living off a defined income and capital, juggling the demands of a high maintenance home with day to day living costs becomes more difficult.

When you are getting closer to retirement, it is a good idea to start monitoring your spend and thinking carefully about the impact of house maintenance costs in retirement.

Moving into a lower maintenance house

A number of people decide to sell their home before retirement, aiming for a lower maintenance house. However, this does not necessarily mean that this lower maintenance house will cost less than your current home.  Some people need to add funds to their housing costs to get a suitable low maintenance house.

If you decide that a lower maintenance house is relevant for you in retirement, take into account the aging process as well and look at the following features in a new home:

  1. How much garden and land is there to be looked after? Can you do this yourself or will you have to pay someone to manage it in the future?
  2. How many stairs are there in the house? How will you be able to manage these in your 80’s and 90’s?
  3. Is there suitable access for a limited mobility or disabled person for the future?
  4. How wide are doorways and bathrooms? If you become wheelchair dependent in the future, how will this property work for you?
  5. How secure is the property? Are there neighbours or services which are easy to contact?
  6. How close is the property to health care and services?

Budgeting for house maintenance

If you decide to remain in your home for the rest of your life, a good plan is to get the major maintenance projects completed prior to retirement, and budget for future repaints or major projects.

According to BRANZ, only about 40 per cent of homes are being well maintained.

The following article by Rob Stock suggests that there are three approaches to home maintenance:

  1. Ignore it and leave your estate a ‘do up’ property. This gets a little tricky if the rain starts pouring through the roof while you are trying to stay dry underneath it.  But, you could selectively ignore the maintenance.
  2. Pay as you go – and find the funds for the projects out of your annual retirement cashflow.
  3. Plan for maintenance – by setting aside an amount for future work.

A rule of thumb…

According to Rob Stock, landlords talk about setting aside

Read more here.

Preferred News Sources Around the World

Despite the rise of websites and search engines as alternatives to "classic“ news sources such as television, newspapers and the radio, the TV is still the news source most people around the globe rely on. That’s the result of a global survey of more than 30,000 online consumers across 60 countries conducted by Nielsen.

When asked where they get the news, 53 percent of the global respondents named the television as one of their go-to sources. Search engines and social media sites were the second and third most popular choices with newspapers relegated to fourth place.

Not surprisingly, news preferences vary across different generations. However, TV is the most popular choice for Millennials (21-34), Gen Xers (34-49), Baby Boomers (50-64) and the Silent Generation (65+) with Generation Z respondents (15-20 years old) the only ones favouring social media sites over TV for news consumption.

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