With the increase in the retirement age, changes to our superannuation and the anticipated reduction in the asset limits for retirees, saving for your retirement is not easy.
On top of the challenges given to retirees from the government, there are so many different packages and ways to invest your money that sometimes you just don’t know which way to turn. Then again, you hear of so many people losing their money, due to poor investment choices, that just finding an honest to goodness investment is fraught with an unhealthy amount of stress.
That’s why it is good to know that you can still put together a sizable nest egg for your retirement, which will help you out of a tight spot in later years – and it’s all about bricks and mortar.
Save for your retirement with real estate
There is no better time to purchase real estate than in today’s financial market. With interest rates so low, it seems daft to put your money anywhere else. After all, Aussies have always loved their homes and the property market is always a safe bet.
Yes, the market cycles up and down, but if you keep your eyes open and your ear to the ground, you can easily purchase the right property at the right price. So long as you don’t buy at the height of a real estate cycle and try to sell at the bottom, then over time, capital gains will continue to grow your nest egg nicely.
With a few properties under your belt, you will have a much more positive outlook on life and a much better foundation for your retirement. One of the positives about buying investment properties is that the rent pays off your mortgage and if there is any difference between the two, then you just negative gear it at tax time.
You can also claim a lot of improvements against your tax, so the out of pockets might be either non-existent or very minimal. Once you retire, then you can decide whether or not to sell one or more of your investment properties and realise the gains or just continue on and accrue more capital gains.
Fixed rate loans vs variable rates for your investment properties
When the interest rates are so low, it just makes sense to go with a fixed mortgage and lock in a really low rate for the next 3-5 years. With a low fixed rate on your investment property loans, you can focus on the capital gains and with low $ loan repayments (due to fixing at a really low interest rate), then the rent quite often covers all of the remaining expenses.
So if you want to set up a sizable nest egg for your retirement, check out the fixed rate interest home loans found at NPBS and look forward to a bright future.
What are your tips for saving for retirement?
This is an S2 POST.