Struggling To Get By In Retirement? Leveraging Your Assets For Liquidity

Children's piggy banks with a pile of pennies

Your retirement years are your golden years. You should be free to enjoy them in comfort and (dare we say it) just a little luxury. The autumn of your life should be the time at which you divest yourself of all the stress and anxiety that plagued you throughout your working life. A time when you focus on what really matters like your family and your spouse. It should be about looking after yourself in mind and body, enjoying regular gentle exercise and keeping your mind active. It should be about seeing the world, and enjoying new experiences. It’s a time for appreciating fine foods and wine. It’s about experimenting with new hobbies and creative pursuits. It’s about using the new abundance of time you have to do things that bring you happiness and contentment.

After all, you’ve earned it.

However, after all those decades of hard work, you may be unpleasantly surprised by how quickly the money you’ve spent a lifetime earning dries up. The cost of living has risen exponentially over the past few decades. And even those who are lucky enough to no longer have a mortgage are feeling the pinch. If you’re still paying off your mortgage or privately renting in retirement, you may find that getting by on your pension and savings eventually becomes untenable. Especially if you want to live life to the fullest in your retirement. Perhaps this is the reason why 1 in 4 Brits “unretires” and rejoins the world of work within 5 years of leaving their jobs.

Of course, money isn’t the only reason why so many retirees return to work. Many simply miss their jobs or the social side of working. Lots of us return to work on a part time basis so that we can enjoy all the benefits of working without the stress. Furthermore, a great many digitally savvy retirees make money a little extra money online as an alternative or supplement to returning to work by helping with academic research or performing other online tasks like acting as a mystery shopper or filling in surveys. However, even those who “unretire” may find their financial situation more precarious at the moment.

This is an especially tough time for retirees

The COVID-19 pandemic has punched an enormous black hole in the economy. As well as bringing many UK businesses of all shapes and sizes to a screeching halt, it has also destabilised our currency (which was already ailing in the wake of the Brexit vote) and created great political and economic uncertainty at home and overseas. As such, many who have chosen to supplement their pension and savings with trading and investment will likely be shocked at how much the value of their commodities has nosedived. Even retirees who have returned to work will likely not be able to return because they are seen as vulnerable due to their age (even if they’re in tip-top shape), and many who are working on a part-time, self-employed or casual basis will not have the luxury of furlough to supplement their income.

What’s more, with annual house prices dropping for the first time since 2012, many retirees are concerned that even the investment that is their home isn’t safe. Many retirees are understandably upset and annoyed that having done everything right, their financial security is not all that they were led to believe it would be.

Without the option of earning money, and struggling to get by on their pensions alone may find themselves struggling. As such, pensioners from all walks of life may find themselves struggling with liquidity right now. Fortunately, you may be able to find some liquidity quickly by leveraging the assets you’ve spent a lifetime accumulating.

First of all, don’t panic sell your stocks and shares!

When we talk about liquidity, your first instinct may be to sell all of your existing stocks and shares out of panic. After all, since so many foreign currencies and business stocks seem to be nosediving right now, the urge to cut your losses and take the cold hard cash is completely understandable. But any financial advisor worth their salt will tell you not to panic sell. While this kind of fast economic contraction is rare, it is not unprecedented. It’s certainly not the first, and it won’t be the last. While recession may be on the cards for the immediate future, we need to remember that recession is just another reality of world economics and happens periodically every once in a while.

Does that mean that all of your investments are still golden? Probably not. But it’s far too early at the moment to see how things will pan out. At the very least we’d advise keeping hold of your stocks until markets stabilise. And if you have stocks in any kind of pharmaceuticals, it goes without saying that you should keep hold of them.

In the mean time, there are lots of ways in which you can leverage your assets to get hold of some liquid currency.

A car
Car cemetery from Pixabay

 

Making money from your car

Kicking yourself because you just invested in a classic car that was too good a deal to pass up? Or perhaps you decided to treat yourself to a brand spanking new Jaguar F-Pace before the world as we knew ground to a halt and the lockdown began? Fear not. The age-old adage may say that that your vehicle loses its value as soon as it’s driven off the forecourt, but that doesn’t mean it’s a money pit on wheels. There are lots of ways in which you can make money from your vehicle without selling it. Of course, you could dedicate some of your free time to being an Uber driver. Passenger transport is still in high demand, although you’d have to make a number of safety precautions. Moreover, if you have a classic or prestige vehicle, you may find that there are more efficacious ways of leveraging this asset for fast liquidity.

Logbook Loans- Logbook loans are an option for the asset rich but cash poor who want to make money from their vehicle without selling it. Also known as “posh pawning”, it allows you to borrow up to 50% of the vehicle’s value which is usually far more than can be borrowed through an unsecured loan.

Different lenders will have different requirements. In most cases the lender will need to sequester your logbook, and some may physically take possession of your vehicle until the loan is repaid. It’s important to note that while all agreements will stipulate that your vehicle should be roadworthy, your vehicle doesn’t necessarily to be in tip-top shape. Which is why this is a great option for those who buy a classic car that they intend to restore as a project to focus on in retirement.

Vehicle Refinancing- An alternative to a logbook loan might be to refinance your vehicle. Classic and prestige car owners know that financing these vehicles isn’t the same as financing a car from your average dealership. Indeed finance agreements on a classic car can take up to 10 years to be settled. And if you are currently paying off your vehicle, and need access to liquid capital, your finance provider may be willing to offer you an equity release. This could enable you to liquidate up to 90% of the vehicle’s total.

You can even do this if you own your vehicle outright.There are a number of classic and sports car finance specialists who can give you a number of refinancing options for one or more vehicles as long as its value exceeds a certain figure (usually about £25,000).

Private Hire- Finally, many classic and prestige car owners find that they can make money by leasing their vehicles out for private hire for special functions and weddings. Some prestige vehicles are also sought after by marketing, advertising and PR agencies to use in photo shoots and video ads.

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Making money from your home

There are a number of ways in which you can make money from the roof over your head. Since the coronavirus lockdown put the economy on hold, interest rates have plummeted. And this could be advantageous for those hoping to liquify their assets by refinancing their homes. You may be able to negotiate a mortgage deal that not only frees up some of the capital that’s already in your property but allows you to repay it under more favourable terms than your old mortgage.

Of course, if you like the capital that’s in your home where it is, you can always make money by letting out your spacious spare room to a lodger.

Making money from your expertise

Finally, there’s one asset that can’t be weighed in terms of cash value, age or condition… but its value is potentially limitless. And you can use it as much as you like without it depreciating in value. We’re talking about the experience and knowledge that you’ve amassed throughout your career. If you’re the self-deprecating type, you may not see the value in passing on your knowledge and experience to today’s business owners. But the truth is that they need you now more than ever. If you have insights that can help them to weather the current storm, it may be a commodity that they’re happy to pay for. There are lots of experienced executives who turn to consulting to fund a more leisurely retirement with complete autonomy over how much, or how little they work. Click Here to see how to join them.

(collaborative guest post)

Author: Anne Fraser

Hi, I am Anne, I am a retired nurse from Bristol in South West England. I am married with five grown up children, four boys and a girl , a grandson and a cat. I like History, travel and reading. I hope to connect with other people with similar interests.

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