Tuesday , 27 / April / 2021
The kids have flown the coop and your family home has much more room than you need these days – it’s time to downsize. But because downsizing often goes hand in hand with preparing for retirement, there’s a lot to think about.
From organising your finances to finding the right suburb for your most relaxing years, it’s important to take stock and ensure you move into the perfect property. Thankfully, we’ve checked off the most important issues – so read on to find out exactly what you should consider when downsizing for retirement.
Understand the costs of moving
Depending on how long you’ve been in your current home, as well as the suburb and size (bedrooms, bathrooms, land size, etc.), downsizing may mean you can free up a significant sum of money to invest in a smaller home – with enough left over to supplement a comfortable retirement.
However, there’s more to downsizing than just making the sale and paying the purchase price of your new home. There are plenty of expenses you’ll need to consider such as real estate agent fees, stamp duty on your new home, furniture upgrades and removalist costs. Be sure to factor these into the final equation so you can easily transition into your next home.
Let go of what you no longer need
You may consider downsizing your assets before moving into a smaller home. This may take some time as there will likely be countless items of sentimental value that, all combined, take up quite a bit of space in your home. If you don’t want to get rid of them entirely, you might consider gifting them to your loved ones to keep in their own home.
Alternatively, you can sell items you no longer use to help fund your next home or to invest in your retirement fund. Donate or throw away any other things you won’t need in your new home. It may be hard at first to part with objects that you’ve lived with for years, but it will give you the opportunity to start fresh in your new home.
Boost your super
The amount of super you need to retire comfortably depends on your lifestyle and savings, and varies person to person. For some, $500,000 is enough for an enjoyable retirement. However, for others that may not be enough – especially if you plan on travelling the world and enjoying the finer things in life.
The good news is that you could boost your superannuation by downsizing. Proceeds from the sale of your home could beef up your retirement fund, meaning you won’t have to scrimp and save while working when you should be relaxing at home and spending time with loved ones.
If you’re an Australian over the age of 65, a federal government incentive allows you to contribute up to $300,000 from the sale of your home directly into your super. Even better, if you’re a couple you can both take advantage of the scheme and inject up to $600,000 into your retirement savings.
Get the timing right
Like most moves on the market, timing is a key factor to ensure you get what you want at a good price. That includes downsizing to a smaller home in anticipation of your retirement years.
Before putting your current home on the market or investing in a new home, ask yourself a few questions:
- What are the current housing values in my area? Is now the best time in the market to sell my home and buy somewhere else?
- How strong is the real estate market in Australia generally? Is it better to wait out a period of instability or is the market thriving so I’ll get a great price?
- What’s the current interest rate and will that mean I get the most bang for my buck?
Getting the timing right is doubly important when you’re ready to retire, as you’ll need to ensure your superannuation, savings and any proceeds from the sale of your home can help see you through retirement for the long term.
Find a friendly community with all the key amenities nearby
Finally, but arguably most important of all, you need to focus on where you will be living in retirement. Depending on your lifestyle and needs, you might want a slight change of scene.
At Harmony on the Sunshine Coast, for example, you can buy land for sale or a house and land package and enjoy the best of both worlds: laid-back village-style living in a lush green neighbourhood, and just a short drive from the pearly-white sands of Maroochydore and Mooloolaba.
And don’t forget about essential amenities! You want to maximise your time in retirement – so find a community that has shopping centres, great cafes, healthcare facilities, banks and ATMs, and handy public transport options all in close proximity.
Central to everything the Sunshine Coast has to offer, Harmony perfectly encapsulates the desirable coastal lifestyle. Boasting a unique casual culture that is also genuine and welcoming, living at Harmony means you are part of a connected community.