Relying on your self-owned property to retire

Retirement planning
Reverse mortgages

Working a whole lifetime to achieve home ownership is a common story of many Hong Kong people. Some think that it is easier to retire as a home owner. At the very least, there is a place to live without being subject to expensive rents. However, if we have spent most of our savings on owning our home, then we may not have enough liquidity to take care of our retirement life. The expenses to maintain and repair the home could be yet another issue.


Tips from financial planners

Property prices in Hong Kong are sky-high, but some people will tell you that it is always better to own a home than to rent. Owning a home does solve the problem of where to live during retirement. However, if you do not have enough liquidity, you too may run into other day-to-day problems. Also, while rent is not an issue, the owner will have other expenses to take care of such as management fees, rates and government rent, as well as any arising major maintenance costs for the building.

Generate a retirement income with your self-occupied property

Selling your own home for a lucrative income will not be an option as you need to consider your accommodation subsequently. On the other hand, subletting it to earn a rental income may give rise to the issue of maintenance. Renting disputes is another matter of concern.

If you do need to generate a retirement income with your self-occupied property, perhaps you can consider taking part in the Reverse Mortgage Programme offered by Hong Kong Mortgage Corporation Limited. Through the programme, you can use your home as security to borrow from a bank. You can opt to receive monthly payouts over a fixed term or throughout your entire life which is steady income for your retirement.

Cut down on spending and generate income

If you have not saved enough for your retirement and you are living frugally, you should find ways to cut costs. Start by eliminating unnecessary expenses. However, if you have exhausted the costs that you can cut, you should consider generating income, including returning to the workforce.


25 April 2018