Retirement Housing

If you live to a great age, will you still be living in your current home?

For many Australians, the family home is their largest asset. You may have worked a lifetime to build the value you have in your home, and in turn it has a lifetime of memories for you.

Selling it as you get older may not be your first choice.

But what if it becomes too big to look after? You may prefer shifting to a smaller home, or a smaller yard. Something with a little less cleaning, gardening, or maintaining to do.

If the answer to the question is yes, there are several things to consider.

Firstly, if you are going to downsize as you get older, do it perhaps 5 years earlier than when you think you should. There is a lot of energy involved in shifting, not only the physical energy required to pack and move, but the emotional energy of making the decision. And it takes time to get used to a new home, new neighbours, and new surroundings. It gets harder to do this as you get older.

Both members of a couple may not be ready to shift at the same time. Mother may be ready for example, because she realises we don’t need a such a large home anymore, but Father feels he may be lost without his shed, and the yard where he spends so much time even though he realises it is getting harder to look after. There are no easy answers, but understanding each other’s views may help reach a compromise.

You should also consider any financial ramifications of downsizing. Many would like to downsize to a smaller home, but that does not necessarily mean they will downsize in value. You may buy a newer home, or shift to a more expensive suburb which may mean you get no change from selling and buying. Add the costs of moving, stamp duty for example, and it may mean it costs you more to downsize.

Or if you do downsize in both size and value, and you find you have money left over, you need to consider what impact this may have on any Centrelink entitlements you have. Your home is not counted as an asset by Centrelink, money in the bank is. The Government has recently enabled older Australians to contribute lump sums to super on the sale of your home which may be an option.

What if you find the house you want before you can sell your house? Can you, or should you, borrow to secure it while you sell yours?

What if someone snaps up yours as soon as it’s listed before you find a new home?

Should you sell then rent instead of buying?

There is a lot to consider, and there are no easy answers. The right time to think about these things is as early as you can so that you control the outcome, and are not forced to make decisions you may not be happy with.