1 00:00:09,093 --> 00:00:11,972 Speaker 1: You're listening to a podcast from news Talk zed B. 2 00:00:12,373 --> 00:00:16,133 Speaker 1: Follow this and our wide range of podcasts now on iHeartRadio. 3 00:00:16,653 --> 00:00:19,213 Speaker 2: We aren't talking about downsize, and it's based on an 4 00:00:19,293 --> 00:00:21,973 Speaker 2: article written by Hannah McQueen, the director and founder of 5 00:00:22,093 --> 00:00:25,172 Speaker 2: age Brightly, and she joins us now, Hannah, very good 6 00:00:25,213 --> 00:00:26,413 Speaker 2: afternoon to you, Hi, Dare. 7 00:00:26,613 --> 00:00:29,893 Speaker 3: When is the best time to downsize, Hannah, R Really. 8 00:00:30,013 --> 00:00:32,813 Speaker 4: Before you want to? If I'm being honest, I think 9 00:00:32,813 --> 00:00:35,933 Speaker 4: we tend to leave it quite late for a lot 10 00:00:35,973 --> 00:00:39,093 Speaker 4: of reasons. It's a pain, it's probably traumatic for some. 11 00:00:40,053 --> 00:00:41,693 Speaker 4: Why would you want to do it sooner? Well, the 12 00:00:41,732 --> 00:00:43,693 Speaker 4: reason you want to do it sooner is most of 13 00:00:43,772 --> 00:00:48,092 Speaker 4: us need to actually get that downsize financial equation to work, 14 00:00:48,452 --> 00:00:50,893 Speaker 4: and when you leave that too late, the opposite working 15 00:00:51,573 --> 00:00:52,333 Speaker 4: don't pan out. 16 00:00:52,732 --> 00:00:55,093 Speaker 3: Are people realistic about how much money they will make 17 00:00:55,133 --> 00:00:56,892 Speaker 3: from their downsize. 18 00:00:56,373 --> 00:01:00,013 Speaker 4: Hannah, No, my experiences, we tend to overstate what we 19 00:01:00,053 --> 00:01:02,733 Speaker 4: get for our home and understate what we're going to 20 00:01:02,773 --> 00:01:06,613 Speaker 4: pay for the next home. And some of the reasons 21 00:01:06,613 --> 00:01:08,893 Speaker 4: for that is often the home you will leave like 22 00:01:08,933 --> 00:01:11,653 Speaker 4: it might be a large family home on a big section, 23 00:01:12,373 --> 00:01:15,932 Speaker 4: but the people who can afford that property, the market 24 00:01:16,013 --> 00:01:18,652 Speaker 4: of those people is smaller than the market you're moving to, 25 00:01:18,813 --> 00:01:21,173 Speaker 4: so you can feel like you're giving up a lot, right, 26 00:01:21,253 --> 00:01:23,773 Speaker 4: maybe moving from that to a townhouse or a three 27 00:01:23,853 --> 00:01:27,333 Speaker 4: bedroom with it, you know, a teeny tai section. The 28 00:01:27,373 --> 00:01:31,572 Speaker 4: sacrifice is monumental, but the financial gain doesn't usually mirror 29 00:01:31,652 --> 00:01:34,933 Speaker 4: what you're given up. So, and you're also moving to 30 00:01:34,973 --> 00:01:37,253 Speaker 4: a market that is fuller, so more people in it, 31 00:01:37,292 --> 00:01:39,413 Speaker 4: which is pushing the price up for what you're paying 32 00:01:39,453 --> 00:01:40,053 Speaker 4: for as well. 33 00:01:40,333 --> 00:01:44,533 Speaker 3: Interesting, So how much should people depend on the downsize 34 00:01:44,813 --> 00:01:46,133 Speaker 3: for their retirement? 35 00:01:47,933 --> 00:01:52,373 Speaker 4: Yeah, well that's I guess that's an individual question. Most 36 00:01:52,453 --> 00:01:54,573 Speaker 4: Kiwis run out of money kind of in their seventies, 37 00:01:54,653 --> 00:01:57,013 Speaker 4: right like they had ki Wei say that that eggs 38 00:01:57,053 --> 00:02:00,213 Speaker 4: out a little bit and then the well is dry, 39 00:02:00,813 --> 00:02:03,133 Speaker 4: and so then they have to try and live on 40 00:02:03,173 --> 00:02:06,373 Speaker 4: the pension, which is tricky. It's possible, but it's tricky 41 00:02:06,453 --> 00:02:09,733 Speaker 4: and for me, I would think kind of hard. So 42 00:02:09,853 --> 00:02:11,733 Speaker 4: then you go to where's the money going to come from? Well, 43 00:02:11,773 --> 00:02:13,693 Speaker 4: it needs to come from your home unless you've got 44 00:02:13,733 --> 00:02:16,373 Speaker 4: other assets. So you've got to sell your home or 45 00:02:16,373 --> 00:02:18,373 Speaker 4: you've got to get a reverse mortgage. Both of those 46 00:02:18,532 --> 00:02:22,773 Speaker 4: have problems. Risks attached to it. How do you manage that? Well, 47 00:02:23,293 --> 00:02:26,293 Speaker 4: if you need, like what's the pinchon twenty five grand 48 00:02:26,333 --> 00:02:29,373 Speaker 4: a year, so you're a couple, that's fifty grand. Both 49 00:02:29,532 --> 00:02:32,173 Speaker 4: people kind of want to have a little bit more 50 00:02:32,213 --> 00:02:34,613 Speaker 4: than that. So even if that's another twenty grand a 51 00:02:34,693 --> 00:02:37,453 Speaker 4: year that you need to get from somewhere, Well, if 52 00:02:37,453 --> 00:02:40,293 Speaker 4: you're seventy, we need to fund your retirement till ninety 53 00:02:40,773 --> 00:02:43,493 Speaker 4: twenty grand a year, what have we got. We've got 54 00:02:43,532 --> 00:02:46,893 Speaker 4: twenty years. That's four hundred grand we need from downsizing. 55 00:02:47,373 --> 00:02:50,053 Speaker 4: I think that's the equation. Well, you've got to play 56 00:02:50,053 --> 00:02:52,093 Speaker 4: that trump card well if you're going to play it, 57 00:02:52,173 --> 00:02:54,373 Speaker 4: but most people will don't play it well. And it's 58 00:02:54,733 --> 00:02:57,013 Speaker 4: oh nothing worse than someone who doesn't play the trump 59 00:02:57,093 --> 00:02:58,532 Speaker 4: card at the right side. 60 00:02:58,293 --> 00:03:00,373 Speaker 2: Right, Yeah, I mean it must be hard for people 61 00:03:00,373 --> 00:03:02,653 Speaker 2: when they reach retirement or even into their seventies and 62 00:03:02,653 --> 00:03:05,053 Speaker 2: they want to downsize, but to give up what they've 63 00:03:05,093 --> 00:03:07,053 Speaker 2: had for a long time, and maybe they want to 64 00:03:07,093 --> 00:03:09,132 Speaker 2: downsize to a new build, then they've got to give 65 00:03:09,213 --> 00:03:11,973 Speaker 2: up all their possessions that they've spent a lifetime acquiring. 66 00:03:12,213 --> 00:03:14,453 Speaker 2: So they are all difficult decisions, right Imagine for a 67 00:03:14,453 --> 00:03:16,292 Speaker 2: lot of people. Yes, they're looking at how much money 68 00:03:16,293 --> 00:03:18,893 Speaker 2: they need for retirement, but also they don't want to 69 00:03:18,972 --> 00:03:20,613 Speaker 2: have a downgrade in their lifestyle. 70 00:03:21,972 --> 00:03:25,813 Speaker 4: Yeah, that's right. It's a difficult process to go through. 71 00:03:25,893 --> 00:03:28,613 Speaker 4: It's normally quite exhausting. You normally have to shed about 72 00:03:28,653 --> 00:03:31,573 Speaker 4: seventy percent of your possessions that you have worked really 73 00:03:31,613 --> 00:03:34,653 Speaker 4: hard to build. So the emotional side of it isn't 74 00:03:34,733 --> 00:03:38,133 Speaker 4: lost on me. But the reason why you downsize earlier 75 00:03:38,253 --> 00:03:40,813 Speaker 4: is so that you can maintain the lifestyle that you want. 76 00:03:41,493 --> 00:03:45,013 Speaker 4: What happens when you downsize later is often it's forced 77 00:03:45,293 --> 00:03:47,933 Speaker 4: on you. And so that means someone has a fall, 78 00:03:48,293 --> 00:03:50,293 Speaker 4: they go into hospital, and then they need to be 79 00:03:50,333 --> 00:03:52,133 Speaker 4: in a rest home. Well, you don't have money to 80 00:03:52,333 --> 00:03:54,733 Speaker 4: buy them a care bed, so you've got to downsize 81 00:03:54,733 --> 00:03:59,413 Speaker 4: the home. That happens so often, and you're making these 82 00:03:59,453 --> 00:04:05,013 Speaker 4: sort of flurry of decisions amongst huge emotional stress, and 83 00:04:05,253 --> 00:04:07,533 Speaker 4: that's when you have to drop your pants, and people 84 00:04:07,573 --> 00:04:10,173 Speaker 4: take advantage of that. So the impact is if we 85 00:04:10,173 --> 00:04:13,373 Speaker 4: don't do it sooner or earlier, you're not in control 86 00:04:13,453 --> 00:04:15,893 Speaker 4: of that process. And if you want to invest in 87 00:04:15,933 --> 00:04:18,373 Speaker 4: your health so that you stay out of hospital in 88 00:04:18,373 --> 00:04:21,533 Speaker 4: the first place, that also takes the money that the 89 00:04:21,573 --> 00:04:24,133 Speaker 4: pension is unlikely to forge you. 90 00:04:24,613 --> 00:04:27,093 Speaker 3: It's a bit of a catch twenty twenty catch twenty 91 00:04:27,093 --> 00:04:29,413 Speaker 3: two situations when it comes to grandkids and stuff, though 92 00:04:29,453 --> 00:04:31,573 Speaker 3: I mentioned because you want to have you have this 93 00:04:31,773 --> 00:04:35,053 Speaker 3: view of your house as you're paying it off, and 94 00:04:35,093 --> 00:04:39,933 Speaker 3: you imagine kids coming home with their kids, Christmases in 95 00:04:39,973 --> 00:04:42,333 Speaker 3: the house, people playing on the lawn, lovely all that 96 00:04:42,413 --> 00:04:45,293 Speaker 3: kind of stuff, so very hard to go. This is 97 00:04:45,373 --> 00:04:48,533 Speaker 3: the financially best time to do it, as opposed to 98 00:04:48,533 --> 00:04:52,413 Speaker 3: this is the emotionally and best family time to do it. 99 00:04:52,413 --> 00:04:53,213 Speaker 3: If you see what I'm. 100 00:04:53,053 --> 00:04:57,613 Speaker 4: Saying, Absolutely the two bever meet right. Like, the best 101 00:04:57,613 --> 00:05:00,533 Speaker 4: time to actually downsize your home from a financial perspective 102 00:05:00,573 --> 00:05:03,293 Speaker 4: is probably when the kids move out. And I get 103 00:05:03,373 --> 00:05:06,493 Speaker 4: we've got the romance of them coming back for Christmas 104 00:05:06,533 --> 00:05:08,293 Speaker 4: and all of that, but for one or two time 105 00:05:08,613 --> 00:05:11,373 Speaker 4: a year for some people locking up all that capital. 106 00:05:12,093 --> 00:05:16,893 Speaker 4: To be honest, as normally it's normally experience anyway, you have. 107 00:05:16,893 --> 00:05:19,453 Speaker 3: The romance of when you're sitting at home by yourself 108 00:05:19,493 --> 00:05:22,213 Speaker 3: at Christmas and they've gone to the other the other 109 00:05:22,253 --> 00:05:23,453 Speaker 3: side of the family's house. 110 00:05:24,933 --> 00:05:27,413 Speaker 4: Yeah, and a lot of people can't even keep up 111 00:05:27,413 --> 00:05:29,973 Speaker 4: with the maintenance on the house, right, like it actually 112 00:05:30,053 --> 00:05:32,333 Speaker 4: is too big a deal. And then the family come 113 00:05:32,373 --> 00:05:35,693 Speaker 4: and it's a working bee every time. It's I think 114 00:05:35,733 --> 00:05:38,253 Speaker 4: that there are a lot of emotions, you know, even 115 00:05:38,293 --> 00:05:41,253 Speaker 4: the kids might have the romance of keeping the family 116 00:05:41,333 --> 00:05:45,653 Speaker 4: home around. Why would you downsize? That seems crazy? Well, 117 00:05:45,653 --> 00:05:48,053 Speaker 4: you're doing it because there's a risk that the decision 118 00:05:48,093 --> 00:05:50,293 Speaker 4: is going to be taken away from you. But when 119 00:05:50,493 --> 00:05:54,213 Speaker 4: I did work around people who enter rest homes, you know, 120 00:05:54,253 --> 00:05:57,133 Speaker 4: so that's when you kind of that's not independent living. 121 00:05:57,173 --> 00:05:58,893 Speaker 4: That's when you need a nurse to look after you. 122 00:05:59,533 --> 00:06:02,373 Speaker 4: Seventy percent of people who arrived at the rest home 123 00:06:02,853 --> 00:06:06,853 Speaker 4: weren't expecting to be there only two weeks before. Oh wow, 124 00:06:07,013 --> 00:06:10,213 Speaker 4: something had happened, and then it's like, oh, here we go, 125 00:06:10,733 --> 00:06:14,213 Speaker 4: and we're trying to prevent that thing from happening. And 126 00:06:14,293 --> 00:06:18,053 Speaker 4: sometimes the home is the risk to these people right back. 127 00:06:18,093 --> 00:06:21,493 Speaker 4: If the home safety's you know, if you've got two stories, 128 00:06:21,653 --> 00:06:24,653 Speaker 4: or or there's just say a lot of maintenance to 129 00:06:24,693 --> 00:06:27,493 Speaker 4: be done well, that can create fall's risks for people. 130 00:06:27,573 --> 00:06:31,213 Speaker 4: So you accidentally fall over maintaining the house that the 131 00:06:31,213 --> 00:06:34,213 Speaker 4: family is supposed to come into long Christmas Day, and 132 00:06:35,093 --> 00:06:36,933 Speaker 4: then you're in hospital, and then you're in a rest home. 133 00:06:38,093 --> 00:06:41,533 Speaker 4: This is the grim reality. And if we come back 134 00:06:41,573 --> 00:06:44,373 Speaker 4: to that home, you have spent your life paying off 135 00:06:44,413 --> 00:06:48,413 Speaker 4: that mortgage, and good for you. Let's make sure the 136 00:06:48,413 --> 00:06:51,973 Speaker 4: next twenty five years of retirement are good years. It 137 00:06:52,053 --> 00:06:55,093 Speaker 4: upsets me when I see people that have this beautiful 138 00:06:55,093 --> 00:06:58,053 Speaker 4: house but no money. They don't even are too scared 139 00:06:58,093 --> 00:07:00,613 Speaker 4: to spend money, or they don't have liquidity to spend money. 140 00:07:01,133 --> 00:07:03,573 Speaker 4: What's that all about. We've just got to get the 141 00:07:03,613 --> 00:07:04,493 Speaker 4: balance a bit better. 142 00:07:04,813 --> 00:07:07,533 Speaker 3: What we need to do is either take the Hallmark 143 00:07:07,693 --> 00:07:11,333 Speaker 3: view out of life or bring back the granny cottage. 144 00:07:12,093 --> 00:07:14,813 Speaker 3: I think my kids need to put up a granddad 145 00:07:14,853 --> 00:07:17,013 Speaker 3: cottage for me and the next. 146 00:07:16,973 --> 00:07:19,093 Speaker 2: You're looking forward to that you've spoken about that before. 147 00:07:18,893 --> 00:07:21,093 Speaker 3: They can start building our twenty years. I mean, I 148 00:07:21,133 --> 00:07:23,493 Speaker 3: mean still at high school, but still they need to starting. 149 00:07:23,813 --> 00:07:25,773 Speaker 3: They need to think about me and my retirement. 150 00:07:26,493 --> 00:07:31,053 Speaker 5: Yeah, that's when your kids can be an investment for you, right, 151 00:07:31,093 --> 00:07:32,813 Speaker 5: they can actually give you a return, because at the 152 00:07:32,813 --> 00:07:36,773 Speaker 5: moment it's the other way straight return. 153 00:07:36,573 --> 00:07:38,813 Speaker 3: So far sit for emotional returns. 154 00:07:38,853 --> 00:07:41,533 Speaker 2: Yeah, you nicely said, Hey, Hannah, great to catch up. 155 00:07:41,573 --> 00:07:43,773 Speaker 2: Thank you very much. It's a great article and we 156 00:07:43,813 --> 00:07:46,413 Speaker 2: will catch up again soon. That is Hannah McQueen. She 157 00:07:46,693 --> 00:07:49,213 Speaker 2: is the founder and director of Age Brightly. You can 158 00:07:49,253 --> 00:07:50,573 Speaker 2: ever read of that article on the Hero. 159 00:07:51,093 --> 00:07:53,733 Speaker 1: For more from News Talk Said B. Listen live on 160 00:07:53,813 --> 00:07:56,773 Speaker 1: air or online, and keep our shows with you wherever 161 00:07:56,853 --> 00:07:59,373 Speaker 1: you go with our podcasts on iHeartRadio.