Advice requested for income

jem16

ReportInvestor wrote:

It helps the OP, but does it help his m-i-l?

The house is the m-i-l's only chance of a decent retirement.

I agree and what m-i-l suggests seemed fine. She wants to sell up and maybe buy something smaller using the proceeds to provide an extra income.

However her s-i-l said

I had considered suggesting an annuity but I'm fairly sure she won't do that as she wants to keep some money to pass on to her family.

Equity release may not therefore be suitable for her.

EdInvestor

With my way of planning I can do what I like with my house not what I have to do because I have made no other provision.

You miss my point.When it's a question of peoples' homes being taken by the authorities to pay for long term care, then equity release might come in quite handy

Of course an immediate needs annuity is even better if you can afford one.

ReportInvestor

That is what the s-i-l has said his m-i-l wants.

The facts of this situation are that if the m-i-l is to enjoy one third of the sort of life you have, jem16, then there will be nothing to pass on to the s-i-l.

And someone, like an IFA, or maybe me, needs to tell the s-i-l, and his m-i-l, that uncomfortable fact.

jem16

EdInvestor wrote:

You miss my point.When it's a question of peoples' homes being taken by the authorities to pay for long term care, then equity release might come in quite handy

Of course an immediate needs annuity is even better if you can afford one.

Thanks for the link - I will keep it in mind.

However why would I need it if my pension would pay for my keep?

ReportInvestor

Whose thread is this?

You can afford to avoid annuities. Others might not be so lucky.

jem16

ReportInvestor wrote:

That is what the s-i-l has said his m-i-l wants.

True. Hopefully m-i-l will tell he s-i-l that.

The facts of this situation are that if the m-i-l is to enjoy one third of the sort of life you have, jem16, then there will be nothing to pass on to the s-i-l.

And someone, like an IFA, or maybe me, needs to tell the s-i-l, and his m-i-l, that uncomfortable fact.

I agree which is why I think using equity release as a feasible means of retirement planning is fundamentally flawed. Unfortunately I have seen Ed recommend this method in several posts.

I simply replied earlier by agreeing with DH that it should be a last resort. The fact that my late husband and I agreed that we had to plan for our retirement means that I should be very comfortable in my retirement as well as being able to pass something on to my sons should I wish.

EdInvestor

jem16 wrote:

Thanks for the link - I will keep it in mind.
However why would I need it if my pension would pay for my keep?

You wouldn't. But earlier you said in relation to your house:

It's all mine though, not a bank's. Unfortunately it may also be needed to look after me should I need to go into a home.

So now I'm a bit confused.

However while this may not be a problem for you, it's much more likely to be a problem for the OP's M-I-L, isn't it, because she only has the state pension and a bit of interest on capital, so there's no way she will be able to avoid having her house taken to pay if she has to go into a home.

I trust that you wouldn't think that a woman in this kind of position who decided on equity release had "failed" in any way. One should perhaps point out that the main reason women get into this kind of situation is because their selfish husbands don't buy joint life annuities, so they don't have enough to live on when he dies.

ReportInvestor

jem16 wrote:

I agree which is why I think using equity release as a feasible means of retirement planning is fundamentally flawed.

That is flawed logic.

Equity release may be some people's only means of retirement planning.

I would agree that an enforced move may open up other options, and at the IA we all agree that downsizing is preferable to equity release.

But to be frank, there isn't enough capital available here for all the usual options.

EdInvestor

I agree which is why I think using equity release as a feasible means of retirement planning is fundamentally flawed. Unfortunately I have seen Ed recommend this method in several posts.

I'm afraid there's a distinct lack of realism on this thread, to be quite frank. Most people are quite unable to earn and save enough these days to acquire adequate pensions and other capital resources as well as a wholly owned property, so that they can leave the capital in their house out of the retirement income equation.

jem16

EdInvestor wrote:

I trust that you wouldn't think that a woman in this kind of position who decided on equity release had "failed" in any way.

I didn't mention anyone else failing. I said I would feel that way.

One should perhaps point out that the main reason women get into this kind of situation is because their selfish husbands don't buy joint life annuities, so they don't have enough to live on when he dies.

Time to take control of your own finances girls