Today’s fast paced; insecure, inflationary and highly destabilizing environment has made retirement planning the core of every individual’s financial goals.
Having a home of one’s own was the core desire which fueled the boom in the Indian real estate sector in the late nineties. Planning for retirement has transformed from being restricted to safe government policies to market linked plans.
Today with the slow death of the joint family system and the need to have a home of one’s own after the kids grow up and fly the coop, the need and prevalence of retirement communities also seem to be gaining ground.
These consist of a cluster of houses which people buy like any other residence. They are designed as per the needs of senior citizens with facilities like wheelchair friendly corridors, community kitchen, parks, hospital facility etc. Unlike usual senior living homes in retirement communities they can stay with their families.
It is one of the ways to secure post retirement financial independence via means of real estate. It is opposite of a normal home loan. Under a reverse mortgage, one gives his property to the financial institution for a fixed tenure and receives monthly installments. Even at the end of the tenure, the installments stop but one can continue to live in the property.
After individuals’ death, the legal heirs are given an option to settle the dues else the house is sold. If there is any extra money fetched from the sale, it is passed on to the legal heirs. Also, the property is reevaluated at regular intervals during the tenure and installment amount is adjusted accordingly.
In the end, to maintain a relaxed lifestyle post retirement one should start planning early and should analyze carefully the options available.