A married couple is retiring. Before the decision: Should you withdraw your pension Fund capital, as pension, as a capital or as a mixed form? Today, it can be useful to invest the Capital in a property, you can hear a lot of places.
“Each Situation is unique and must be carefully looked at,” said Jackie Bauer (31), Economist and pension expert at UBS. It is clear, however: the lower the conversion rate of the pension funds is, the more attractive a real estate investment. “You have to income specifically, consider how much return you rent or housing cost savings generated, and this return, the conversion rate used for the pension, compare,” says Bauer.
Better yield possible
the conversion rate Is about 6 per cent, of the capital amount of the advance withdrawal from the pension Fund, in most cases, not attractive. A recent study suggests to Pension and residential property of UBS. However, the conversion rates are, in many places, on the March back. In the non-mandatory part of the Occupational Pension scheme the rate of Conversion is currently moving more in the direction of 5 percent.
“If the conversion rate is low, can be generated by the capital relation and the real estate investment potentially get a better return,” says Bauer.
Basically, the conditions are currently good to purchase a home. The historically low mortgage rates, ensure that the Buy is often cheaper than Rent.
holds a capital subscription in the pension age risks: the need To assume more responsibility as a farmer. Because you have to manage its pension itself “” and has no or a lower, secure income. “This Consideration is especially in view of the rising life expectancy as well as rising healthcare costs is an important aspect,” says Bauer.
care is not cost-underestimate
So can avenge a lower pension, if in an advanced age, the maintenance costs can’t be covered.
in Addition, the real estate market also carries risks with regard to prices. “The purchase of a property by means of pension Fund assets shortly before Retirement is likely to be financially worthwhile especially in the long term,” says Stefan Heitmann, CEO of the financial adviser, money Park. In such a decision, the consideration of the family Situation and any further inheritance is also always with you.
prior to the Retirement,
buy is Important, according to Heitmann also, at the mortgage completion of a provider comparison to make. Because after Retirement, the income, which affects the portability in a negative – i.e. the ratio of the current cost of property to income drops. The running costs are currently allowed to make not more than one-third of the income. The mortgage providers offer different terms, which could impact financially on the customer.