COMMENT:

Q: Due to a change in circumstances, I find myself renting for the first time in my life. I am 71 and worried about what to do to ensure my finances last.

I have $500,000 in the bank on term deposit. I have considered buying but like the idea of having none of the worries of home ownership.

My monthly income is $1207 in interest from the term deposit and $1644 in NZ Super. After paying regular monthly bills including rent, I have $924 a month for food, petrol and everything else.

It has been suggested to me that I put $10,000 into an account and pay myself $200 a week to supplement the living money. And do this each year?

I am worrying myself sick over this.

A: That's not good and not necessary.

Normally I encourage retired people to own their own home if they can. Home ownership gives you a feeling of security and more control over your environment.

But the downside is that you tie up money in the house that you could be spending. And in your situation that will make a big difference to your quality of life. Given that home ownership doesn't appeal to you — and in some places $500,000 won't buy much anyway — let's go with your preference to keep renting.

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