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Hannah McQueen: Age Brightly founder with her tips for downsizing · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk zed B.
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  Speaker 2: We aren't talking about downsize, and it's based on an
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  Speaker 2: article written by Hannah McQueen, the director and founder of
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  Speaker 2: age Brightly, and she joins us now, Hannah, very good
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  Speaker 2: afternoon to you, Hi, Dare.
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  Speaker 3: When is the best time to downsize, Hannah, R Really.
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  Speaker 4: Before you want to? If I'm being honest, I think
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  Speaker 4: we tend to leave it quite late for a lot
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  Speaker 4: of reasons. It's a pain, it's probably traumatic for some.
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  Speaker 4: Why would you want to do it sooner? Well, the
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  Speaker 4: reason you want to do it sooner is most of
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  Speaker 4: us need to actually get that downsize financial equation to work,
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  Speaker 4: and when you leave that too late, the opposite working
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  Speaker 4: don't pan out.
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  Speaker 3: Are people realistic about how much money they will make
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  Speaker 3: from their downsize.
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  Speaker 4: Hannah, No, my experiences, we tend to overstate what we
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  Speaker 4: get for our home and understate what we're going to
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  Speaker 4: pay for the next home. And some of the reasons
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  Speaker 4: for that is often the home you will leave like
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  Speaker 4: it might be a large family home on a big section,
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  Speaker 4: but the people who can afford that property, the market
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  Speaker 4: of those people is smaller than the market you're moving to,
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  Speaker 4: so you can feel like you're giving up a lot, right,
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  Speaker 4: maybe moving from that to a townhouse or a three
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  Speaker 4: bedroom with it, you know, a teeny tai section. The
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  Speaker 4: sacrifice is monumental, but the financial gain doesn't usually mirror
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  Speaker 4: what you're given up. So, and you're also moving to
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  Speaker 4: a market that is fuller, so more people in it,
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  Speaker 4: which is pushing the price up for what you're paying
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  Speaker 4: for as well.
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  Speaker 3: Interesting, So how much should people depend on the downsize
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  Speaker 3: for their retirement?
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  Speaker 4: Yeah, well that's I guess that's an individual question. Most
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  Speaker 4: Kiwis run out of money kind of in their seventies,
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  Speaker 4: right like they had ki Wei say that that eggs
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  Speaker 4: out a little bit and then the well is dry,
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  Speaker 4: and so then they have to try and live on
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  Speaker 4: the pension, which is tricky. It's possible, but it's tricky
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  Speaker 4: and for me, I would think kind of hard. So
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  Speaker 4: then you go to where's the money going to come from? Well,
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  Speaker 4: it needs to come from your home unless you've got
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  Speaker 4: other assets. So you've got to sell your home or
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  Speaker 4: you've got to get a reverse mortgage. Both of those
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  Speaker 4: have problems. Risks attached to it. How do you manage that? Well,
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  Speaker 4: if you need, like what's the pinchon twenty five grand
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  Speaker 4: a year, so you're a couple, that's fifty grand. Both
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  Speaker 4: people kind of want to have a little bit more
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  Speaker 4: than that. So even if that's another twenty grand a
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  Speaker 4: year that you need to get from somewhere, Well, if
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  Speaker 4: you're seventy, we need to fund your retirement till ninety
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  Speaker 4: twenty grand a year, what have we got. We've got
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  Speaker 4: twenty years. That's four hundred grand we need from downsizing.
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  Speaker 4: I think that's the equation. Well, you've got to play
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  Speaker 4: that trump card well if you're going to play it,
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  Speaker 4: but most people will don't play it well. And it's
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  Speaker 4: oh nothing worse than someone who doesn't play the trump
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  Speaker 4: card at the right side.
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  Speaker 2: Right, Yeah, I mean it must be hard for people
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  Speaker 2: when they reach retirement or even into their seventies and
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  Speaker 2: they want to downsize, but to give up what they've
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  Speaker 2: had for a long time, and maybe they want to
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  Speaker 2: downsize to a new build, then they've got to give
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  Speaker 2: up all their possessions that they've spent a lifetime acquiring.
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  Speaker 2: So they are all difficult decisions, right Imagine for a
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  Speaker 2: lot of people. Yes, they're looking at how much money
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  Speaker 2: they need for retirement, but also they don't want to
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  Speaker 2: have a downgrade in their lifestyle.
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  Speaker 4: Yeah, that's right. It's a difficult process to go through.
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  Speaker 4: It's normally quite exhausting. You normally have to shed about
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  Speaker 4: seventy percent of your possessions that you have worked really
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  Speaker 4: hard to build. So the emotional side of it isn't
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  Speaker 4: lost on me. But the reason why you downsize earlier
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  Speaker 4: is so that you can maintain the lifestyle that you want.
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  Speaker 4: What happens when you downsize later is often it's forced
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  Speaker 4: on you. And so that means someone has a fall,
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  Speaker 4: they go into hospital, and then they need to be
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  Speaker 4: in a rest home. Well, you don't have money to
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  Speaker 4: buy them a care bed, so you've got to downsize
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  Speaker 4: the home. That happens so often, and you're making these
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  Speaker 4: sort of flurry of decisions amongst huge emotional stress, and
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  Speaker 4: that's when you have to drop your pants, and people
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  Speaker 4: take advantage of that. So the impact is if we
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  Speaker 4: don't do it sooner or earlier, you're not in control
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  Speaker 4: of that process. And if you want to invest in
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  Speaker 4: your health so that you stay out of hospital in
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  Speaker 4: the first place, that also takes the money that the
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  Speaker 4: pension is unlikely to forge you.
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  Speaker 3: It's a bit of a catch twenty twenty catch twenty
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  Speaker 3: two situations when it comes to grandkids and stuff, though
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  Speaker 3: I mentioned because you want to have you have this
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  Speaker 3: view of your house as you're paying it off, and
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  Speaker 3: you imagine kids coming home with their kids, Christmases in
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  Speaker 3: the house, people playing on the lawn, lovely all that
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  Speaker 3: kind of stuff, so very hard to go. This is
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  Speaker 3: the financially best time to do it, as opposed to
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  Speaker 3: this is the emotionally and best family time to do it.
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  Speaker 3: If you see what I'm.
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  Speaker 4: Saying, Absolutely the two bever meet right. Like, the best
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  Speaker 4: time to actually downsize your home from a financial perspective
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  Speaker 4: is probably when the kids move out. And I get
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  Speaker 4: we've got the romance of them coming back for Christmas
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  Speaker 4: and all of that, but for one or two time
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  Speaker 4: a year for some people locking up all that capital.
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  Speaker 4: To be honest, as normally it's normally experience anyway, you have.
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  Speaker 3: The romance of when you're sitting at home by yourself
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  Speaker 3: at Christmas and they've gone to the other the other
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  Speaker 3: side of the family's house.
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  Speaker 4: Yeah, and a lot of people can't even keep up
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  Speaker 4: with the maintenance on the house, right, like it actually
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  Speaker 4: is too big a deal. And then the family come
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  Speaker 4: and it's a working bee every time. It's I think
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  Speaker 4: that there are a lot of emotions, you know, even
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  Speaker 4: the kids might have the romance of keeping the family
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  Speaker 4: home around. Why would you downsize? That seems crazy? Well,
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  Speaker 4: you're doing it because there's a risk that the decision
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  Speaker 4: is going to be taken away from you. But when
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  Speaker 4: I did work around people who enter rest homes, you know,
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  Speaker 4: so that's when you kind of that's not independent living.
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  Speaker 4: That's when you need a nurse to look after you.
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  Speaker 4: Seventy percent of people who arrived at the rest home
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  Speaker 4: weren't expecting to be there only two weeks before. Oh wow,
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  Speaker 4: something had happened, and then it's like, oh, here we go,
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  Speaker 4: and we're trying to prevent that thing from happening. And
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  Speaker 4: sometimes the home is the risk to these people right back.
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  Speaker 4: If the home safety's you know, if you've got two stories,
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  Speaker 4: or or there's just say a lot of maintenance to
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  Speaker 4: be done well, that can create fall's risks for people.
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  Speaker 4: So you accidentally fall over maintaining the house that the
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  Speaker 4: family is supposed to come into long Christmas Day, and
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  Speaker 4: then you're in hospital, and then you're in a rest home.
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  Speaker 4: This is the grim reality. And if we come back
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  Speaker 4: to that home, you have spent your life paying off
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  Speaker 4: that mortgage, and good for you. Let's make sure the
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  Speaker 4: next twenty five years of retirement are good years. It
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  Speaker 4: upsets me when I see people that have this beautiful
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  Speaker 4: house but no money. They don't even are too scared
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  Speaker 4: to spend money, or they don't have liquidity to spend money.
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  Speaker 4: What's that all about. We've just got to get the
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  Speaker 4: balance a bit better.
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  Speaker 3: What we need to do is either take the Hallmark
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  Speaker 3: view out of life or bring back the granny cottage.
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  Speaker 3: I think my kids need to put up a granddad
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  Speaker 3: cottage for me and the next.
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  Speaker 2: You're looking forward to that you've spoken about that before.
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  Speaker 3: They can start building our twenty years. I mean, I
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  Speaker 3: mean still at high school, but still they need to starting.
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  Speaker 3: They need to think about me and my retirement.
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  Speaker 5: Yeah, that's when your kids can be an investment for you, right,
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  Speaker 5: they can actually give you a return, because at the
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  Speaker 5: moment it's the other way straight return.
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  Speaker 3: So far sit for emotional returns.
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  Speaker 2: Yeah, you nicely said, Hey, Hannah, great to catch up.
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  Speaker 2: Thank you very much. It's a great article and we
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  Speaker 2: will catch up again soon. That is Hannah McQueen. She
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  Speaker 2: is the founder and director of Age Brightly. You can
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  Speaker 2: ever read of that article on the Hero.
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