Don't just focus on saving for pension before retirement. Also set aside a budget for home repairs and unexpected expenses.
Many people believe that as long as they save enough for a pension and pay off their mortgage before retirement, they can enjoy life with peace of mind in their later years. The reality may not be that simple! A 67-year-old man in Japan not only paid off his mortgage when he retired, but also had about 20 million yen (approximately NT$4.06 million) in bank deposits. He received an annuity of 190,000 yen (approximately NT$39,000) every month. He thought his life would be secure after retirement, but he didn’t expect it. Only two years after his retirement, a water leak suddenly occurred in his home. After inspection, it was found that the roof, exterior walls and internal wood of the house were all aged. The renovation cost reached 8.5 million yen (approximately NT$1.73 million), which instantly plunged him into financial anxiety and even kept him awake at night because of fear.
Japanese media "THE GOLD ONLINE" reported that 67-year-old Hiroshi Sasaki (pseudonym) lives with his wife in a Toten House in Tokyo. After graduating from college, he worked in a medium-sized enterprise. After retiring at the age of 60, he re-employed and did not completely leave the workplace until he was 65. At that time, the mortgage had been fully paid off, and I still had about 20 million yen in savings.
He believes that there has been a discussion about the "20 million yen issue for old age" in Japan in the past. He has saved this money, plus a monthly annuity of 190,000 yen. After his wife, who is 5 years younger, also starts receiving an annuity, the couple's monthly annuity income is expected to reach 280,000 yen (approximately NT$57,000). The two children have also started their own families, so they should no longer have to worry about life.
Unexpectedly, two years after his retirement, a water leak broke his retirement dream. This old house, which is more than 30 years old, has not undergone large-scale renovations in the past. Although the roof and exterior walls have already shown signs of aging, since there are no obvious problems, the repairs have been postponed.
It wasn't until a leak occurred and the property owner inspected it that they discovered that the waterproofing function of the roof had declined, the exterior walls had deteriorated in many places, and even the internal wood of the building had been damaged. After evaluation, the total cost of roof renovation, exterior wall renovation, structural wood reinforcement and waterproofing work was as high as 8.5 million yen. Even if you ask another dealer for an estimate, you will get roughly the same result.
What scares him even more is that spending 8.5 million yen does not mean that the house will no longer need to be repaired. He may also face replacement costs for water heaters, water pipes and bathroom equipment in the future.
Sasaki said frankly that in the past, he had a salary income and was still able to cope with large expenditures suddenly. Now he only lives on an annuity. He feels uneasy when he thinks about how many repair bills are waiting for him in the future. He even wakes up in the middle of the night with money on his mind.
The report pointed out that the average expenditure of people in their 60s on housing acquisition and renovation in the past year amounted to 8.69 million yen (approximately NT$1.77 million). This also highlights a cruel reality: paying off the mortgage does not mean that housing costs return to zero. The real test of retirement is not how much money has been saved, but whether one can withstand the subsequent large expenditures.
