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Retireassist Introduction For Retirees
- 1. Copyright KCL 2009 Welcome David Halling
- 2. Copyright KCL 2009 Housekeeping • Nothing to sell – just information, no pressure • Please hold questions to the end • We are not financial planners – Please seek your own independent advice • Data used is considered reliable but is only for illustration or assistance with explanations
- 3. Copyright KCL 2009 Some facts • Retirees are fastest growing population – 5,400,000 over 55 today – 7,800,000 over 55 by 2026 • We spend average 15 years in retirement • Expectancy is Males 79 / Females 84 – Males 84 / Females 87 by 2051 • Only 1 in 12 people over 70 live in retirement village
- 4. Copyright KCL 2009 Choice Preparing for the future whilst still in control Lifestyle Downsizing Friendship with similar people of similar interests Moving closer to family Why do we consider moving? Less choice Maintenance and costs of running house Health Security Concern for spouse Isolation
- 5. Copyright KCL 2009 Aussie culture Lack of available information Denial Costs prohibitive****** Family influence****** Why don’t we move?
- 6. Copyright KCL 2009 Reduction in wealth 2% 7%40%
- 7. Copyright KCL 2009 Solution? • Flexible range of financial supports •Most common is assistance with the gap between available funds and entry cost •Retireassist can act as a ‘partner’ •Can convert gap into equity
- 8. Copyright KCL 2009 Example • Couple 70 and 71yo with – home $370,000 – Cash $ 10,000 – Super/shares $ 10,000 • Buy retirement lifestyle property for $400,000 • Retireassist partners with $60,000 (15% equity) • Cash has increased by 300% – more lifestyle options – Capital growth now on higher value property Home Cash Shares Home Cash Shares Before Retireassist After Retireassist
- 9. Copyright KCL 2009 Later? •Property is offered for resale in 10 years time at market value of $700,000 •Owner takes original 85% equity back ($340,000) PLUS 85% of capital growth ($255,000) •This equals $595,000 in total •Retireassist takes original 15% equity back ($60,000) PLUS 15% of capital growth ($45,000)
- 10. Copyright KCL 2009 0 100 200 300 400 500 600 Som'ton Pk Glenelg Pasadena Ashford Start 5 years on Its largely about location too! Retirement property is an investment – a big one! Must perform like any other in your portfolio ‘Numbers’ have to add up * Source RPData June 2009
- 11. Copyright KCL 2009 Other supports • Deferral of maintenance fees and other on-going costs until resale with no direct cost or fees • This could include the retireassist plus care services available at Baywaters
- 13. Copyright KCL 2009 Questions? 1300 796 311
Editor's Notes
- Welcome & thanks for taking the time to visit expo trust you will enjoy Name DH representing KCL and RA Introduction to RA, will not cover every aspect but hope to provide enough info 4 u to want to ask for more Aim is 15mins, will move quickly but time after for questions
- ABS census and reports Bankwest social indicator survey 2009 RP data and Real Estate Institute of South Australia
- Set scene – you know more about it than me , just context PAUSE - FUN - CHOCOLATES - CENSUS If Iike numbers - today 1.4% over 85 - 9% by 2051 – 6x as many! One of things numbers does indicate is that there will be more pressure on RLP availability in future – more on that later
- Research shows there are generally 10 primary reasons Divided into two groups – first is complete choice Lifestyle – spend money differently Downsize – with int rates at lowest in 49 yrs younger & younger neighbours – prefer sim age/interests Second is less choice – most often found where family not readily available
- Research shows 5 of the most common Culture – pride of home ownership & memories Information – not every one has family / close friends to assist Denial – obvious, we don’t like to admit Costs prohibitive (stars because it is a major issue to discuss) Aging population more competition for available property Predicted 15 years time there will be shortfall 2000 retirement villages (remember 5.4m today >55, 7.8m in 2026) RLP is priced as any other R/E– majority is new – leads to situations where many ‘average’ retirees faced with trying to buy new homes with money older home brings – cant happen - this is compounded by the reduction in wealth – talk about in minute – challenges for retirees Family influence (stars again) Not often talked about Fear of financial burden - eg contribution to entry cost - this is largely why retireassist
- Previous slide referred to costs prohibitive – but WHY? How happened? ABN AMRO CHIEF ECONOMIST Kieran Davies said “Turmoil on the stock markets and falling property values saw the average wealth of Australians drop five per cent . - the biggest six-month drop since the 1982-83 recession (incidentally 2nd biggest since WW2) Property values, which account for around two-thirds of overall household wealth, are estimated to have fallen by two per cent in the last six months of the year. As at January 2009, the market had already experienced 14 months of poor performance, and most economists expect prices to stay depressed for sometime, reflecting the cycle of the larger market downturns. Meanwhile, the average value of household assets such as stocks and shares fell by 6.6 per cent in the three months to March and a further 1.5 per cent in the quarter to June.(8.1% in total) As at 31st March 2009, the value of the ASX 200 had fallen by 40% over the preceding year. This market downturn wiped $680 billion off the value of Australian shares” Strong chance room a lot in room affected, bet someone in room has put move to RLP on hold in the last 12 mths Bankwest 73% lost income and 28% cancelled/reduced planned exp eg holidays & moving to RLP Enough of the challenges, lets look at a solution
- Retireassist program created in response Flexible also innovative – as far as we know we are only one offering such a comprehensive range of solutions Primary aim is to overcome the financial obstacles that may be present (refer to earlier slide wealth) & provide choices or solutions that you may not be aware of Gap - example does follow to explain what I mean Partner - chose word carefully - again example does follow where I will explain why used this word
- This example illustrates our primary solution – most common Everyday couple (list assets) living fairly locally, like many missed major benefit of SG’tee , so by far biggest asset is their home For various reasons such as discussed earlier (could be maintenance, reduced mobility etc) decided they need to move to RLP, selected $400,000 – straight away major diff between home/asset and purchase price In consultation with Retireassist they have been approved for an equity contribution of $60,000 - this eg 15% on our $400k property Short term benefit to our young couple is immediate increase in cash (GRAPH) and of course they are now able to move to RLP & enjoy benefits of community living Long term benefit is CAP GRWTH may be higher even if rate of growth is same as they now have a higher property value then when they started (400 vs 370) Primary benefit is established base for maximum lifestyle options without need to rely on family – sold, bought & improved lifestyle whilst preserving independence
- OK, so what of the future? Happily living in RLP and decide to move to QLD Resale at 10 yrs - 5.75% approx half of actual rate of growth for Adelaide metropolitan residential homes Remember word ‘partner’ earlier - Just like if you and friend bought 85/15 upon sale u would want original capital & ‘profit’ back in equal proportions – this is same (GRAPH) – majority will go to retiree Obviously the retiree will have costs assoc with handing back the property and we will be happy to discuss these in the full context of your own personal circumstances at your convenience To that end we have consultants available ASK ME happy to make a time to meet with you
- REALLY IMPORTANT but almost always overlooked (very quickly) RLP is an investment , and just like any other – it has to perform No point buying into a retirement village because it is ‘cheap’ or just because a friend is there Lifestyle issues aside it has to return you capital growth Many retirees sell out of an area returning (say) 8% CG to move to a location returning only 5% - you wouldn’t take cash out of bank and reinvest in on same terms would you? GRAPH EG on screen – starting point 5 years ago was a $300,000 property - JUNE 2009 Median price using actual data (remember RLP no different) Somerton PK $335,000 Glenelg $592,000 Pasadena $500,000 Ashford $414,000 pls don’t underestimate this VERY IMPORTANT issue & feel free to ask us for any information you may require
- EG Pas / BW 2 years / Alb 3 yrs – car park at BW BW +care services - imagine having a cleaner every week or having your laundry done & not paying a cent until you sell the property – with no extra cost or fees attached – avail at BW
- Available at any of these 6 locations Don’t forget the ASK ME
- Thank every one!!! Im here and also out in the expo RA stand – please ask questions today but MORE IMPORTANTLY you all have a RA brochure Pls read at home and call us to meet, visit website ,happy to discuss NO OBLIG NO PRESSURE for you, a friend or a family member INTRODUCE Scott Ellis REMAX – same no obl no pressure, starting point is usually value of home URGE to appraise In about 10 mins SCOTT will present Questions