Plan your advance capital withdrawal in good time
Before retirement, most insured persons are free to choose whether they wish to receive their pension fund capital as a pension, a lump sum or a mixture of the two. Depending on the pension fund, they could even be forced to withdraw some of the capital if their pension assets are above average. You could consider investing this capital in real estate, among other investment classes. Your decision should be based on what will give you the most financial security and the most flexibility.
What role does life expectancy play?
If you are a healthy, married retired couple with above-average life expectancy, due to current conversion rates you will usually be better off receiving a monthly pension from the pension fund. Ultimately, this will mean you receive more capital than you actually saved. You’ll also be better protected if one of you dies. By contrast, pensioners with a shorter life expectancy could benefit more from withdrawing their capital early and leaving their offspring more.
Rent the property or live in it yourself?
With a high loan-to-value ratio, you can achieve a return of between 4 and 6 percent by renting a property. If you live in the property yourself, the return will be similar. However, with a lower loan-to-value ratio, the return will be smaller.
Living in the property yourself is often less risky
When you buy an apartment to rent, you’ll need to consider the risks: mortgage interest, building repairs, loss of rent if the property is empty, difficult tenants or a fall in prices. You should have sufficient funds free to cope with lost payments or to repay the mortgage. If, however, on the longer term you plan to live in the property yourself or let relatives use it, this lowers its risk profile.