A worry-free retirement

A worry-free retirement*

Like many Kiwis, Simon* and Natasha* worked hard all their lives in various jobs so that they could enjoy a well-earned retirement. They bought a property in Taranaki in 2007 which they upgraded and was largely paid off by the time they retired in their late 60’s. And therein lay the issue. Most of their money was tied up in their property.

“As we eased into retirement in 2015, it became apparent that we would need more money if we were going to continue living the life to which we had become accustomed,” said Simon. “That’s not to say we wanted to do anything flash, we just wanted to be able to go fishing around New Zealand, help our family if we needed to and take care of everyday expenses.”

The couple initially thought they’d have to sell their much-loved property and downsize to unlock some cash, a prospect that did not appeal to them.

“When you downsize, you typically end up settling for something that you’re not entirely happy with but just have to accept. What’s more is that if you settle for a cheaper, inferior quality property, there’s the possibility that whatever money you make on a sale will have to go into fixing or maintaining it. It really didn’t make sense for us.”

The couple were looking into their options when Simon saw a Heartland Bank Reverse Mortgage ad on TV in 2019. Intrigued, he made an appointment with a Heartland Reverse Mortgage specialist to find out more.

“We were immediately impressed by what the specialist had to say and how a reverse mortgage could potentially help us maintain our standard of living in retirement. We didn’t feel like we were just being sold a product for the sake of it but that we were being given good, solid financial advice.”

Six months later in June 2019, Simon and Natasha decided to take out a reverse mortgage. They had gone through all the relevant literature, discussed the mortgage with their families and felt confident that they were making the right decision. The only snag was that their property is held in a family trust which they thought would hold things up. With the help of the couple’s lawyer, the issue was quickly resolved, and they were able to draw down some money.

The couple bought a much-needed car for their granddaughter, a covered trailer and new curtains for their house. A few months after taking out the mortgage, Simon and Natasha discovered their neighbour had been piling dirt against their boundary fence which had damaged it. Fortunately, the couple were able to repair the damage with funds from their reverse mortgage. The couple have also enjoyed some extended fishing trips in their caravan and were able to cover an expensive vet bill.

“For us it really has been about making the most of our retirement and being able to ‘top up’ when we need to. We can take care of the necessities and spoil ourselves a little without having to downsize or worry about how we’re going to pay for things. Ultimately, it’s given us peace of mind, and that’s priceless.”

*Names changed for privacy purposes.