Live Freely with a Suitable Retirement Plan

The present state of the economy has made it very difficult for the average homeowners to manage their day to day finances with their salaries. But since they have a regular source of income they can somehow manage them. But what about those who have no such source, especially the retired individuals? With their fixed resources rapidly depleting by the day, they are being driven to the edge of desperation.

The situation is not so bitter for the homeowners. They can take the help of the equity release plans and improve their financial situation. These plans have been around for a long time. Though they did not have a very favourable report in the beginning, they have now come a long way and have improved a lot on the way. Now they are being monitored by the Financial Services Authority (FSA) and therefore do not have as much risks as they used to have. However, there are several intricacies that need to be understood in order to profit more from the schemes.

 

According to the advisors, equity release is a last resort and should be kept as such. Once it is done, there is no turning back. Therefore, it is highly recommended that you make a thorough assessment of your finances. Just because your neighbour has released equity from the property does not mean you have to do the same. Find out if they will be suitable for your financial situation.

 

Any independent financial advisor he/she would advise you to tap on your savings rather than releasing the equity. You might also find out if you qualify for any government grant. Again if you ar5e already receiving a grant releasing equity might discontinue it. You might also consider moving into a cheaper location or move in with a member of your family to cut the costs.

 

Equity release will reduce the value of your inheritance drastically. So, if you are planning on leaving an inheritance for your children then this might not be the best course of action. Also, if you release the equity on your home then you will become a tenant on your own home, albeit rent free. But you will have to maintain the house. This could drain your limited resources and would hardly serve any purpose of your own. The only saving grace that equity release has is that it provides you with tax-exempted cash whether as a onetime payment or as monthly investment.

 

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