When you retire, income decreases. But becoming an owner or investing in a lease can help you better manage this transition financially.
When you retire, income decreases. And since housing is the first item of expenditure in the budget of French households, in retirement it weighs even more. That’s why MeilleursAgents has explored various solutions to better manage this transition financially. The first is, of course, owning a home before retirement. An option that allows you to protect yourself from increasing the rate of effort, ie the weight of the cost of housing from income.
“A typical middle-income two-person household could afford a 61 m2 house in France’s 51 largest city in 2002 with a 20-year loan and a savings rate of 33%. Since then, the income of this same household has increased. evolved: they are on average 63% higher at the time of retirement in 2022. An increase that makes it possible to significantly reduce the rate of effort, which falls from 33% to 20% on average 1 year before retirement, “- says MeilleursAgents. Because in fact the monthly payments on the loan (with rare exceptions) are recorded throughout the term of the loan.
In 20 years, prices jumped by 172%
In addition, reminds MeilleursAgents, the purchase allows you to increase capital. In 20 years, prices in the 51 largest cities in France and Paris jumped by an average of 172%. “It is enough for a typical household to receive a net capital gain of an average of € 133,111 per house purchased on credit 20 years ago (including notary and agency fees on purchases, property taxes, condominium fees and maintenance costs).
MeilleursAgents ranked cities where households that bought an apartment 20 years ago (with their purchasing power at the time) received the highest net capital gains. At the top of the ranking we find Lyon, where the price per square meter is now 5,401 euros. Thus, in 20 years, the capital of Gaul offers a net increase in capital of almost 260,000 euros and a price increase of 279%. Next are Bordeaux with a net capital increase of 247,896 euros (price increase of 314%), Paris with a net capital increase of 233,663 euros (+ 199%), Villarban with 201,268 euros (+ 280%) and, finally, Merignac 194,354 euros). + 251%).
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Monthly income supplement
Another solution is to invest in rent. “By investing in a 20 m2 studio that is self-financing for 10 years before retirement, a typical household will thus be able to earn an additional net average monthly income of 235 euros in France’s 51 largest cities at the time of departure,” the study said. . However, beware of the contribution, which can be significant: for this type of real estate in large cities in France requires an average of 55,221 euros. “The amount, which can rise to 146,386 euros in Paris, the city that instead has the highest additional rent minus 380 euros,” said MeilleursAgents, which shows the top 5 cities where you can invest with a low contribution. prepare for retirement.
Saint-Etienne is in first place, where by investing in a studio that is self-financing and without a significant contribution, the household will be able to benefit from a net monthly income of 151 euros in addition to retirement. Next are Limoges with a contribution of 3744 euros and a net monthly income of 151 euros, then Le Mans with a contribution of 3891 euros and a net monthly income of 151 euros, Metz with a contribution of 6527 euros and a net monthly income. 182 euros and, finally, Nim with a contribution of 9726 euros and a monthly net income of 168 euros.
“Beware, however, of the risks associated with renting space and depreciating real estate, even if they remain low in mainland France,” said Barbara Castillo Rico, head of economic research at MeilleursAgents.