Welcome to The Money Coach, a Times of Malta column where readers can ask questions about life's money issues. Send your questions about personal finances, inheritance, gifting or other personal finance topics to moneycoach@timesofmalta.com

I am 63 years old, just two years shy of having a pension. My wife has never worked, so my employment pension will be our primary source of income once I retire.

I am aware that it will be challenging to get by on just that, which is why continuing to work is a constant thought. On the other hand, after 40 years of working non-stop, I really wish to spend more quality time with my wife and family.

We currently live in a maisonette with a roof (so we fully own the airspace). Recently, a contractor approached me and said he’d like to build an apartment block instead of our maisonette. In exchange, we would get one of the apartments and a substantial sum of money.

The apartment would of course be much smaller than the house we’re living in now, but the additional sum of money would make retirement much more comfortable.

I’m tempted by the offer, though I also feel guilty about leaving much less inheritance to our children… apart from the emotional connection I have with the house where I have lived almost all my life!

What is your opinion about this?  

Pension Dilemma

Luca responds: 

What you’re facing is increasingly common, and not just among people your age. Many are being approached to have their home rebuilt into a block of apartments, with the offer of keeping one or two apartments in return, while the contractor keeps the rest.

To tackle this properly, you first need to have a proper, professional evaluation of the current worth of your property. A professional architect can do this for you.

Without knowing what your current property is worth, you will not be in a position to properly evaluate the offer on the table. Remember, no one will look after your interests better than yourself!

Assuming that the contractor has offered you the fair value of the property, the second thing you must consider is what kind of retirement you are envisaging. Some people want to travel more, or take up a new hobby. These things can cost money and you need to plan for that.

I am assuming you have no extra money invested which you can utilise, so the thing you have to focus on is where you’ll get that extra money to turn your targets into a reality. If the sum of money offered by the contractor covers this, then the offer might make sense to you.

If you decide to take the offer, be smart about using that extra cash. Do not fall into the trap of spending it all in just a few years. Think long-term and speak to a licenced investment advisor about the ways in which you can make that money work for you, be it bonds, high-dividend stocks, ETFs etc.

As for your concern about not leaving much inheritance for your children: every parent wants to leave a great inheritance to their children. But ask yourself, would your children prefer an inheritance, or seeing you enjoying your retirement and having financial peace of mind?

You need to ensure your wife and yourself are taken care of first. Your children will have time to build their own future. Guilt is normal, but you shouldn’t let this keep you back from living the retirement you deserve to live.

I hope this helps.

Luca is the founder of the Money Coaching Hub. Email him your financial questions or your response to today's question for a chance to be featured in a future column.

Disclaimer: This column is intended to provide general information on various topics related to personal finance. The information provided is for educational purposes only and should not be construed as personalised financial advice for your specific situation. Financial decisions are highly individual and can vary greatly based on your unique circumstances, goals, and risk tolerance. The author of this column is not authorised to provide financial advice. Before making any financial decisions, it is recommended to seek professional financial advice from an authorised financial advisor.