Planning ahead: Why owning a home early is crucial for peaceful life after employment


Owning a home early is crucial for retirement. PHOTO | CAROLINE WAMBUI | NMG 

Having spent a good part of one’s productive years toiling to make ends meet, a retiree is deserving of a peaceful retirement.

To achieve this, it is important to start retirement planning as soon as one has a source of income.

This entails identifying the most important retirement goals such as where to live and how to practically meet daily needs during this period.

One way to secure a peaceful retirement is through home ownership.

For many, a home is already an important investment goal and it becomes even more critical in retirement as one will possibly live in it for the rest of their lives.

The decision involves where to live as one can opt to live in the urban areas, rural or a gated community — all options are dependent on personal and family preferences as well as the availability of finances.

Many individuals in formal employment look forward to their pension payout, however, depending on the savings and investment decisions made earlier in life, the flow of monthly income may not be sustainable.

Those in informal employment will have to make detailed plans for their retirement and take personal steps that will enable them to avoid having to work longer than is desirable.

Just like retirement, inflation is also inevitable. By the time one gets to retirement age, the rent may prove to be unaffordable for the retiree who is relying only on their pension and they may struggle to keep a roof over their head if they do not own their house.

Having a home relieves the retiree of the burden of constantly worrying about looking for sources of rent and even when the income is available they can channel the funds towards other investments that may guarantee a cash flow.

This will ensure a diversified flow of income that can help retirees have more financial security and peace of mind.

Therefore, embarking early on the homeownership journey cushions the retiree against rent adjustments due to inflation over the years and offers a sense of stability.

As earlier stated there is not much cash flow for most retirees, as their main source of income has been cut.

Therefore, when there is a shortage of finances, they can rest assured that there is no risk of eviction by the landlord for failing to meet rent requirements.

When one has acquired a home, it removes the need to move from one house to another looking for more affordable options.

Not only does homeownership bring financial stability, but it also brings a sense of social stability which is important for a retiree because as one is in the search for a home, he/she can decide on the environment that makes them feel welcome and has a sense of community.

Retirement planning is, therefore, vital as it helps a retiree to identify in advance, places that offer a sense of community where one can build their social network with other homeowners.

Undoubtedly, home ownership plays a crucial role in contributing to a peaceful retirement.

It is therefore important for any person whose goal is to have a stress-free retirement to start their homeownership journey early.

In Kenya, there are various options to make the homeownership dream a reality as there are various options for home financing.

One of the options is to take up pension-backed mortgages where one can access up to 40 per cent of their pension savings in securing a home and up to 60 per cent of their pension funds as collateral for a mortgage.

Waudo-Gulavi, is a manager business development and training at Enwealth Financial Services.

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