Financially Preparing for Retirement: Equity Release

Financially Preparing for Retirement: Equity Release

Increasing Wealth for an Equity Release:

The decision to retire is a major milestone in one’s life. It is important that you prepare for this event by making sure that your finances are up-to-date and all bases are covered before you leave the workforce for good. One of the considerations many people overlook when they think about retirement planning, however, is equity release. Equity release allows retirees to access their home equity without selling it or moving out; this can be done through a lifetime mortgage or an annuity purchase plan (such as those offered by Equity Release Council).

To release equity, you will need to calculate the value of your home with this online calculator and how much equity you currently have available. We recommend using a mortgage adviser or qualified financial advisor for this calculation, as they are most familiar with credit ratings and other factors that can affect your assessment.

Online Calculator

Then, you should decide what type of equity release plan suits your needs.

Equity release is not appropriate if you plan on moving in retirement. You may be able to use some of the equity release proceeds without paying tax on it (depending on what type of equity release product you choose). If your house does not change hands after retiring, then chances are very high that there won’t be any transfer tax at all; however, taxes may still apply depending on which state you live in. Keep an eye out for scams – only use providers who are qualified by the Equity Release Council.

Also, be sure to keep in mind that the amount of equity you release will affect your credit rating.

Comments are closed.