Smoothly Navigate Your Retirement Transitions
There is so much to think about when you are considering transitioning to retirement living.
Whether you need to sell your home depends on several factors and can affect not just your well-being but have lasting financial implications.
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Is Downsizing The Right Option For You?
Evaluating the costs and what you need
The first step is to determine the kind of home that suits your lifestyle, level of independence and budget in retirement. It’s important to recognise that if you decide to sell your home, there are a range of costs to consider, including agent and legal fees, as well as stamp duty.
Weighing up if downsizing is right for you
Downsizing can be a daunting task, but it doesn't have to be. If the idea of downsizing is something that you're considering, these few steps can help make the process easier in deciding if it’s right for you.
1. Assess your current living situation
What do you like about where you live now? Could you survive with less space? Are the cleaning and maintenance getting too much?
2. Consider the advantages and disadvantages
Downsizing can offer more financial freedom and the ability to live closer to family, transport and services. However, it could also mean living with less storage space, fewer bedrooms for visitors, and having to give up your beloved family home and possessions.
Alternatives to downsizing your home
If downscaling your home is not a viable option, there are several alternative ways to make the most of your current property.
Renting out a portion of your home can be an excellent way to supplement your income and help pay off any outstanding mortgage or other loans. Dual occupancy can also be an attractive option when more space is needed and two incomes are involved.
Equity release, or `reverse mortgage', can be another great way to access your home’s equity without having to downsize. This type of loan allows you to take out a lump sum or regular payments against the value of your property with no repayment during your lifetime.
These are just a few of the options available for those who may be looking to reduce their financial burden without having to downsize their home. Ultimately, the decision about which alternative is right for you should be based on your individual circumstances.
At Olive Grove, our experienced team is here to help guide you through these decisions and support you in finding the best option for you.
What to do after you downsize
Once you have downsized, the next step for most people is to consider what to do with their newly freed-up capital. Try renting for a while is one option, as it can enable you to explore a new area and see if you like it.
For those looking to invest, there are numerous options available; with many seniors also eligible for the Commonwealth Home Support Programme which can assist with independent living and daily tasks.
Ultimately, it is important to consider your own individual circumstances when deciding what to do after downsizing and make sure you have a financial plan in place for the future.
Impact on Age Pension or government benefits
Downsizing can have a major impact on Age Pension or government benefits. The key factor is to understand how the assets test and income test will be affected by the changes. As such, careful consideration should be taken before making any decisions that could potentially reduce your entitlement to Age Pension or other government benefits. It's important to note that your place of residence is not included in an assets test.
If you sell your home and intend to use the money to buy, build, or renovate another property, you can be excused from paying taxes on the revenue for a maximum of 12 months.
Get independent financial advice
Talk to our team to discuss your options and get expert financial advice tailored to your own circumstances. We understand that everyone’s financial situation is different, and our team of advisors can help you make the best possible decision for your future.
Our advice is independent, so you can be sure it’s in your best interests. Get in touch today to talk about how we can help you take control of your finances.
How Can Moving Affect Your Entitlements?
Visit our FAQs page for more of your questions about downsizing answered.
Why Use Us?
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We have helped hundreds of clients realise greater financial security. Offering a holistic approach coupled with almost 20 years of experience, enables us to unlock more options for your families aged care situation.
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We understand that aged care can often be unexpected, and because we are the aged care specialists, we can setup a financial structure and solution, including execution, quickly.
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With a tailored strategy developed by one of our financial advisers specialising in aged care, and the right asset structure, you can ensure that your loved ones are setup with a long term plan and reduced financial burden.
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We have a deep understanding of the emotional stress when organising aged care. We will work with you and your family to structure financial solutions that meet your needs.
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