Press pause before you decide on a home for retirement

A fully-paid-for home is a great aim if you're planning for a financially secure retirement - but you should actually not buy your "dream retirement cottage" too far in advance.

That's the word from Gerhard Kotzé, MD of the RealNet national estate agency group, who says that while planning to retire to a holiday home that you bought years ago might seem like a great idea, a lot can change before that day arrives.

"For a start, there have been huge economic upheavals and lifestyle changes globally over the past few years that have really altered the traditional idea of retirement, and many people are now opting to continue working well into their 60s and even 70s.

"Others who are still in good health are taking the opportunity after retirement from corporate life to start new businesses, launch new careers, and undertake new tertiary level studies, and a move to an 'active lifestyle' retirement village close to their existing home may actually be a much better move for them than relocation to a coastal or country holiday home."

On the other hand, he says, you could experience unexpected health problems as you get older, and then your best option will probably be to buy a cottage or apartment in a continuing care retirement village (CCRV) where you will have peace of mind about always being able to access any medical assistance you may require."

And then there's the question of possibly leaving friends and family, says Kotzé. "We have seen many upcountry residents who planned to retire at the coast because they always enjoyed their family holidays there change their minds when it hits home that their long-time friends, children and grandchildren won't be going with them, and that they may only get to see them once or twice a year, at best.

"Modern technology can of course do much to help them stay in touch, but it's difficult to make a new circle of friends later in life, and very hard to leave a family support network."

 Apart from these personal issues, he says, a holiday home that seems like a serene and pleasant retirement option now might not stay that way, especially if it's located in an area that suddenly becomes a hugely trendy tourist destination teeming with strangers every holiday season.

"In addition, buying too early and too far away from your current home might mean you also have to deal with the problems of being an absentee landlord for several years. Finding the right tenant and ensuring that the property is properly maintained will be an ongoing concern, even if you have a reliable and responsible letting agent.

"So our advice to those who are considering buying a second property now as part of their retirement planning is to invest in a rental property close to their current home, where they can monitor property values and react quickly to any changes they don't like.

"Then when you are ready to retire - or at least to sell the family home and downscale - you will have the choice of either retiring to this second property, keeping it as an investment, or selling it as well as your primary residence and then buying the retirement home that is exactly right for your needs and preferences at that time."