Retireassist provides innovative financial assistance to people over 55 who fear the cost of moving to a retirement community
Contact us on 1300 796 311 for more information
2. Copyright KCL 2009
Housekeeping
• Nothing to sell – just information, no pressure
• Please hold questions to the end
• We are not financial planners
– Please seek your own independent advice
• Data used is considered reliable but is only for
illustration or assistance with explanations
3. Copyright KCL 2009
Some facts
• Retirees are fastest growing population
– 5,400,000 over 55 today
– 7,800,000 over 55 by 2026
• We spend average 15 years in retirement
• Expectancy is Males 79 / Females 84
– Males 84 / Females 87 by 2051
• Only 1 in 12 people over 70 live in retirement village
4. Copyright KCL 2009
Choice
Preparing for the future whilst still in control
Lifestyle
Downsizing
Friendship with similar people of similar interests
Moving closer to family
Why do we consider moving?
Less
choice Maintenance and costs of running house
Health
Security
Concern for spouse
Isolation
5. Copyright KCL 2009
Aussie culture
Lack of available information
Denial
Costs prohibitive******
Family influence******
Why don’t we move?
7. Copyright KCL 2009
Solution?
• Flexible range of financial supports
•Most common is assistance with the gap
between available funds and entry cost
•Retireassist can act as a ‘partner’
•Can convert gap into equity
8. Copyright KCL 2009
Example
• Couple 70 and 71yo with
– home $370,000
– Cash $ 10,000
– Super/shares $ 10,000
• Buy retirement lifestyle
property for $400,000
• Retireassist partners with
$60,000 (15% equity)
• Cash has increased by 300%
– more lifestyle options
– Capital growth now on
higher value property
Home
Cash
Shares
Home
Cash
Shares
Before Retireassist
After Retireassist
9. Copyright KCL 2009
Later?
•Property is offered for resale in
10 years time at market value of
$700,000
•Owner takes original 85% equity
back ($340,000) PLUS 85% of
capital growth ($255,000)
•This equals $595,000 in total
•Retireassist takes original 15%
equity back ($60,000) PLUS 15%
of capital growth ($45,000)
10. Copyright KCL 2009
0
100
200
300
400
500
600
Som'ton Pk Glenelg Pasadena Ashford
Start
5 years on
Its largely about location too!
Retirement property
is an investment – a
big one!
Must perform like
any other in your
portfolio
‘Numbers’ have to
add up
* Source RPData June 2009
11. Copyright KCL 2009
Other supports
• Deferral of maintenance fees and other on-going
costs until resale with no direct cost or fees
• This could include the retireassist plus care
services available at Baywaters
Welcome & thanks for taking the time to visit expo trust you will enjoy
Name DH representing KCL and RA
Introduction to RA, will not cover every aspect but hope to provide enough info 4 u to want to ask for more
Aim is 15mins, will move quickly but time after for questions
ABS census and reports
Bankwest social indicator survey 2009
RP data and Real Estate Institute of South Australia
Set scene – you know more about it than me , just context
PAUSE - FUN - CHOCOLATES - CENSUS
If Iike numbers - today 1.4% over 85 - 9% by 2051 – 6x as many!
One of things numbers does indicate is that there will be more pressure on RLP availability in future – more on that later
Research shows there are generally 10 primary reasons
Divided into two groups – first is complete choice
Lifestyle – spend money differently
Downsize – with int rates at lowest in 49 yrs younger & younger neighbours – prefer sim age/interests
Second is less choice – most often found where family not readily available
Research shows 5 of the most common
Culture – pride of home ownership & memories
Information – not every one has family / close friends to assist
Denial – obvious, we don’t like to admit
Costs prohibitive (stars because it is a major issue to discuss)
Aging population more competition for available property
Predicted 15 years time there will be shortfall 2000 retirement villages (remember 5.4m today >55, 7.8m in 2026)
RLP is priced as any other R/E– majority is new – leads to situations where many ‘average’ retirees faced with trying to buy new homes with money older home brings – cant happen - this is compounded by the reduction in wealth – talk about in minute – challenges for retirees
Family influence (stars again)
Not often talked about
Fear of financial burden - eg contribution to entry cost - this is largely why retireassist
Previous slide referred to costs prohibitive – but WHY? How happened?
ABN AMRO CHIEF ECONOMIST Kieran Davies said
“Turmoil on the stock markets and falling property values saw the average wealth of Australians drop five per cent . - the biggest six-month drop since the 1982-83 recession (incidentally 2nd biggest since WW2)
Property values, which account for around two-thirds of overall household wealth, are estimated to have fallen by two per cent in the last six months of the year. As at January 2009, the market had already experienced 14 months of poor performance, and most economists expect prices to stay depressed for sometime, reflecting the cycle of the larger market downturns.
Meanwhile, the average value of household assets such as stocks and shares fell by 6.6 per cent in the three months to March and a further 1.5 per cent in the quarter to June.(8.1% in total)
As at 31st March 2009, the value of the ASX 200 had fallen by 40% over the preceding year. This market downturn wiped $680 billion off the value of Australian shares”
Strong chance room a lot in room affected, bet someone in room has put move to RLP on hold in the last 12 mths
Bankwest 73% lost income and 28% cancelled/reduced planned exp eg holidays & moving to RLP
Enough of the challenges, lets look at a solution
Retireassist program created in response
Flexible also innovative – as far as we know we are only one offering such a comprehensive range of solutions
Primary aim is to overcome the financial obstacles that may be present (refer to earlier slide wealth) & provide choices or solutions that you may not be aware of
Gap - example does follow to explain what I mean
Partner - chose word carefully - again example does follow where I will explain why used this word
This example illustrates our primary solution – most common
Everyday couple (list assets) living fairly locally, like many missed major benefit of SG’tee , so by far biggest asset is their home
For various reasons such as discussed earlier (could be maintenance, reduced mobility etc) decided they need to move to RLP, selected $400,000 – straight away major diff between home/asset and purchase price
In consultation with Retireassist they have been approved for an equity contribution of $60,000 - this eg 15% on our $400k property
Short term benefit to our young couple is immediate increase in cash (GRAPH) and of course they are now able to move to RLP & enjoy benefits of community living
Long term benefit is CAP GRWTH may be higher even if rate of growth is same as they now have a higher property value then when they started (400 vs 370)
Primary benefit is established base for maximum lifestyle options without need to rely on family – sold, bought & improved lifestyle whilst preserving independence
OK, so what of the future?
Happily living in RLP and decide to move to QLD
Resale at 10 yrs - 5.75% approx half of actual rate of growth for Adelaide metropolitan residential homes
Remember word ‘partner’ earlier -
Just like if you and friend bought 85/15 upon sale u would want original capital & ‘profit’ back in equal proportions – this is same
(GRAPH) – majority will go to retiree
Obviously the retiree will have costs assoc with handing back the property and we will be happy to discuss these in the full context of your own personal circumstances at your convenience
To that end we have consultants available ASK ME happy to make a time to meet with you
REALLY IMPORTANT but almost always overlooked (very quickly)
RLP is an investment , and just like any other – it has to perform
No point buying into a retirement village because it is ‘cheap’ or just because a friend is there
Lifestyle issues aside it has to return you capital growth
Many retirees sell out of an area returning (say) 8% CG to move to a location returning only 5% - you wouldn’t take cash out of bank and reinvest in on same terms would you?
GRAPH
EG on screen – starting point 5 years ago was a $300,000 property - JUNE 2009 Median price using actual data (remember RLP no different)
Somerton PK $335,000
Glenelg $592,000
Pasadena $500,000
Ashford $414,000
pls don’t underestimate this VERY IMPORTANT issue & feel free to ask us for any information you may require
EG Pas / BW 2 years / Alb 3 yrs – car park at BW
BW +care services - imagine having a cleaner every week or having your laundry done & not paying a cent until you sell the property – with no extra cost or fees attached – avail at BW
Available at any of these 6 locations
Don’t forget the ASK ME
Thank every one!!!
Im here and also out in the expo RA stand – please ask questions today but MORE IMPORTANTLY you all have a RA brochure
Pls read at home and call us to meet, visit website ,happy to discuss NO OBLIG NO PRESSURE for you, a friend or a family member
INTRODUCE Scott Ellis REMAX – same no obl no pressure, starting point is usually value of home URGE to appraise
In about 10 mins SCOTT will present
Questions