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Downsize, relocate or move into aged care

It’s never too late to explore your options

What are your options?

Selling your home

The decision to sell your home can be difficult and there are usually many financial, practical and emotional factors to consider.

You may:

  • want a smaller home
  • be ready for a different lifestyle
  • need to be closer to health care services and facilities
  • want to release the equity in your home and buy a less expensive home.

Selling your home with the intention of buying another that’s easier to maintain and suits your circumstances can be a good lifestyle choice. It can also release money for you to invest in your retirement and provide you with more income for your future.

Thinking about relocating?

Perhaps you’d like to move closer to family or friends or the places you spend most of your time. You may want to reduce the time spent maintaining your home – cleaning, gardening or repairing – and travel without having to worry about who’ll look after your house while you’re away.

Living elsewhere could have a positive effect on your health. Relocating to a warmer climate for example, could improve your health. You may also need to be closer to health care services.

Is downsizing the best option for you?

Whether you’re ready for a smaller home, looking for a sea change or moving for family reasons, using the equity in your home could improve your retirement lifestyle.

But downsizing isn't for everyone. Before putting your home on the market, find out what your options are by using our Home and retirement planner.

Have you considered aged care?

It’s not an easy decision to place a loved one into care—or to consider it for yourself. But being prepared and knowing that you or a loved one may eventually need to pay for a place in an aged care facility should form part of your retirement planning.

Options for funding aged care costs include accessing the equity in the family home or drawing down on your super.

Here are some other questions to help you start thinking about aged care:

  • How will you fund the accommodation bond?
  • Will you need to sell the family home?
  • Will you still be able to get your pension?
  • Will your money last?
  • How can you maximise your entitlements?

What are the hidden traps in downsizing for retirement?

Selling your home may not be an easy or simple decision. There can be unexpected expenses and consequences that affect your government benefits entitlements. There are also many other things to consider before you sell. And there are lifestyle issues to think about too.

You can avoid hidden traps by planning as far ahead as possible and being prepared for the unexpected—professional financial advice is a good place to start. The table below outlines some things to consider.

Potential trap Managing the trap

A smaller place isn’t always cheaper.

Understand all the costs of moving, living in and maintaining a new home before you move.

Selling your home could impact your age pension entitlements.

Be aware how the money from the sale of your home will affect you under the government assets and income tests.

You may miss people and services in your current area.

Explore options like house sitting if you’re thinking of moving to a new area so you can trial a potential location before you commit.

It may be difficult living in a smaller place.

Try locking up some of the rooms in your current home and doing without items you may not be able to take—you may or may not be ready to move to something smaller.

You may not be as prepared for the change as you’d like to be.

Aim to understand exactly what downsizing will mean for you and what’s most important.

The home you buy turns out to be unsuitable down the track.

Before you sell or buy another home, work with a financial adviser to make a long-term plan that can help you understand your options and potential implications.

You’re unable to sell your home for the price you’d like because of issues in the property market.

A financial adviser can help you decide how much money you need to achieve your goals.

Put a plan in place that will help get the best price for your home and buy at the right price too.

Some of the things to consider include:

  • getting advice from a real estate specialist about how the property market cycle is likely to affect prices in the short and long terms and aim to time your sale and purchase accordingly
  • whether to buy and sell at the same time
  • whether selling first will put you in a stronger negotiating position. If you sell first, how long will it take to find your ideal place and where will you live in the meantime? If it takes longer than 12 months your eligibility for government entitlements may be affected
  • the financial and practical implications of buying before selling
  • whether or not renovations and repairs will return a greater profit.

Avoiding the traps

Before considering whether or not to sell your home it’s important to thoroughly understand your reasons for selling.

A financial adviser can help you:

  • take a systematic approach to your decision
  • consider the emotional impact of selling your home and moving
  • understand exactly how much downsizing will cost. What expenses do you need to allow for so you’ll be comfortable later in life?
  • decide on the right time to move—considering your goals and the property market
  • make the most of your opportunities and avoid unexpected expenses. For example, consider how long it may take you to find a new home and whether it’s better to sell first or buy and then sell
  • understand what matters most to you so you can set your downsizing and retirement goals, and achieve them.

Using the equity in your home to fund your retirement

For many Australians, the investment in the family home is the biggest asset, even bigger than super. You may have worked hard and built-up significant equity or value in your home throughout your working life.

If this sounds like you, it may be worthwhile setting up a financial plan that lets you use the equity in your home to improve your retirement lifestyle. Of course you’ll need to think about the risks involved, and a financial adviser can help you do that.

Want to speak to a financial adviser?

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Important information

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It’s important to consider your particular circumstances before deciding what’s right for you. This information hasn’t taken your circumstances into account. 

This information is provided by AMP Life Limited. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you. All information on this website is subject to change without notice.