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700,000 kiwis are over 65 years of age and many are living on the last of their savings, plus National Super.

The latest surveys suggest that 60 % of those over 65 rely entirely, or almost entirely on National Super*. If that is you, don’t feel that
you have let the side down. You are in good company. Don’t think it is just you that has personally failed to provide adequately
for your retirement.

• Source Heartland Seniors Finance 2016.


What went wrong? Nothing.

If you were not lucky enough to get a great kick start, perhaps a sizeable legacy, you did what most others did at the time. Got married quite young, took on a mortgage, hopefully a State Advances 3 percenter!, raised the kids and you had done well to pay all debts by the age of 65 and have a wee nest egg. You did not get much help along the
way. Not much house inflation back then. You may have been part of a Company super scheme. Many were cancelled and participants received a lump sum payout. Hopefully you made a good investment with the proceeds. Many didn’t – remember the share market crash of 87 and latterly for those who felt real estate was a safer bet – the Blue Chip crash – and many others.
The Government was not much help. In 1975 they scrapped the National Super scheme that would have given us all a good pension now. So here we are 65 plus and out of funds before we run out of life! If this describes you or your Mum or Dad give me a call or send me an email.

I will happily speak to groups or public meetings in the greater Auckland area free of charge.


Firstly, you could just go without. Just stiffen up, and be as frugal as you can. This might mean going without, so that when you die your family will at least inherit the family home. Or you could live with one of your children, maybe as carers of grand children to save even more money for their inheritance. You are doing a fine thing. Well, that used to be the case and
older folk will remember this scenario well. It is not that long ago. But in a surprisingly short time our attitudes to inheritance and living with family have changed dramatically. Many older folks are now choosing to live in their own home longer. As much as they love family the thought of living with them sends a shiver! Often unspoken, but the same in reverse with the
children. Maybe downsizing into a retirement village of some kind. Just look at the growth of villages in the past few years. And, thank goodness in MOST cases attitudes of children toward their parents have changed as well - "It's Mum and Dads money - they earned it - they can do what they like with it".

“For five years’ l struggled. I thought l had nothing but my National Superannuation then l found out that l had options. I am now financially independent again. I should have looked at this earlier. Thank you Maurice.”

There are many other choices cash strapped but asset rich people have:

• Sell down • Move to a retirement village • Move to a cheaper town
• Rent out a room • Borrow from children • Borrow from your bank
• Take out a Reverse Mortgage • Buy an annuity product

I do not want to go into a lengthy discussion here on the advantages and disadvantages of each of these options because there are both. It will cost you nothing to find out what options are available, and which option is best for you.


While not necessarily a standard bearer for reverse mortgages, I do want to highlight this type of loan because l believe the product has been unfairly castigated in the past few years.

This is a shame because the perception and the reality are two different things. Over 8000 reverse mortgage loans have been taken up in NZ over the last 10-12 years, certainly long enough for all the bad news about them to be in the media. I am not aware of a single case in New Zealand being reported in the daily newspapers saying how silly people were to take out such a loan and how compounding interest had gobbled up all their house value.

However, I know a great number of people who have taken out a loan would be very happy to tell the media what a life changer a loan of this kind can be.

And by the way ask the grown children of reverse mortgage customers if they would prefer to see Mum and Dad enjoying their retirement like that, or just existing on the pension and see what they say. You will be pleasantly surprised at the response and l am very pleased to report that in many cases it is the children who insist upon their parents taking out such a loan because they are aware of the awful strain a lack of day to day cash can place on Mum and Dad.

I am not preaching the case for Reverse Mortgages, I just wanted to point out that they are a viable option that in my view have been pushed aside by many because of incorrect perceptions about their value.

There is a whole new wave of thinking about to overtake the traditional way we all think about inheritance - and it is on our doorstep now.

$100 billion of real estate value - the biggest exchange of wealth this Country has ever seen is about to change hands from one generation to the next.
Some of that wealth, in some way, will be accessed by this current older generation before the remainder is willed on. Just GOING WITHOUT like many of our parents did is just not cutting the mustard any more with the Baby Boomers.

All I suggest is that you contact me if you are concerned about running out of cash before you run out of life. I can guarantee you I will have given advice in the past to a number of people who have done exactly what you are contemplating It will cost you nothing to find out what options are available, and which option is best for you.


Let me give you a practical example of compounding interest. Sorry to be briefly technical but first l must explain the financial rule of 72 as it applies to compounding interest.

If you borrowed a sum of money on a REVERSE MORTGAGE and the interest rate was say 10% - high by today's standards, but let's stay up there for now, any amount you borrow will double in 7.2 years. Of course remember you pay no interest on a monthly basis on that loan, it simply accrues and is repaid in total when the contract ends.
So say you choose to borrow $50,000 and assuming it was ALL drawn down on day one, very unusual - because customers draw down just what they need from time to time. But let's stick with the worst case, the full $50,000 drawn down on day one, in 7.2 years you would need to pay back $100,000. Sounds a lot - maybe, depending on your need. Now if that $100,000 was billed against a $400,000 freehold home AND assuming there was absolutely ZERO increase in house value over those 7.2 years, one quarter of your house value would have been spent leaving three quarters for your beneficiaries. But you could have had what in
gross terms would amount to a monthly payment of the equivalent of $600 in your hand - for every one of those 86 months in exchange for that loss of equity That's on top of your National Super. That could be the difference between existing on the pension - AND BEING FINANCIALLY INDEPENDENT again.

Having some extra cash to pay the Rates.; buy a new fridge or TV, or being able to enjoy some small luxuries again. Is it sounding like a fair swap now?


Maurice Mehlhopt

I spent the first 25 years of my working life with the Fletcher Challenge Corp. Initially in the rural sector with Wrightson NMA and latterly as General Manager American Express and Managing Director of Centurion Finance.

In 1990 I established my own business consultancy and have worked with a range of Companies in New Zealand and offshore.

I now specialise in providing support and financial options to retirees who may be wanting to do more with their retirement years - but struggle financially to do so. I have had meaningful meetings and telephone links with over 2000 people throughout NZ in the last few years discussing with them all the financial options that may be available in their particular case, and this advice has been given free of charge.
My "pro-bono" time is given to Business Mentors. I have been a member for the past 15 years and it has been a privilege to help in the growth of some great NZ businesses.

I am also a Trustee of the "Moths and butter­ flies of NZ Trust" with a special interest in Monarchs.

An Authorised Financial Advisor (AFA). I am authorised to provide the following types of financial advisor services:
• Financial advice
• Retirement Planning
• Home equity release products
• Annuity products

Disclosure statements will be provided if financial advice given.
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