Tyler Ward Property Services To Save The Masses at Retirement!!

Since the goverment outlined its initial intention a few years ago to increase the working age until retirement and having already implemented the first increase (of many no doubt) the need to plan for retirement is every more important.

And that's before we take into account the reduction in pension plan values due the stagnation of the stock market over the last decade in nominal value (and large reduction in value taking into account inflation) and the 15% reduction in average prices in the housing market over the last 3 years.

Nevertheless I wasn't surprised to read this article in the Telegraph, talking about the lack of real retirement planning, http://goo.gl/lFGlB , given I know many people in their late 40's that haven't planned for retirement, let alone those in their early 30's like myself. Inded when I used to teach property education, it always saddened me when i met those in the late 50's and early 60's with no pension pot at all.

At Tyler Ward Property Services, we've always believed that property should be part of a well thougt out retirement plan which is why everyone at the company owns property. Forgetting speculative property purchases for the moment and dreams of 200% growth in a decade like the 2000's, or clever strutured-finance property purchases of the last 5 years, lets just focus on basic fundamentals.

Even in a worst case scenario of property prices just matching the rate of inflation, we would expect prices to double in a 20 years, as would the rents.

Hence if a person working in their twenties could set aside enough deposit to buy two average houses on a capital repayment mortgage (assume 20% deposit buying 2 x 200k houses) by the time they were 40 yrs old i.e a total of 80k or 4k per year, then at the very least they would 2 houses worth 400k each with no mortgage by retirement, though one they would be living in.

Taking an average yield of 6% then the monthly income would be 2k a month on the investment property.

Given the vast reduction in final salary pension schemes (a topic to be discussed in a later blog) then at the very least someone would have a stable retirement pot to get by with. This is a far better position then many currently find themselves in.

Look out for future posts on how we can use clever strategies to make the above scenario seem incredibily dull!! Our minimum goal should be to get to 4 investment properties as this would provide a 8k a month retirement!