One of the biggest questions in retirement planning, especially in a market like that in Perth, is whether to downsize or stay in your family home.
Remember that we can’t give any individual advice here because everyone’s situation is different. So, don’t constitute any of what we are saying as “advice.” That being said, here are some factors to consider when thinking about downsizing.
The Numbers: Who is Downsizing?
Our parent company, AMP, has some pertinent numbers on their website. According to research cited on the AMP website, approximately 25% of Australians between the ages of 55 and 64 relocated in the last five years. (1)
Four popular reasons were cited. 23% said they wanted to live in a smaller home. 22% said they moved for family reasons. 20% said they moved because they wanted a lifestyle change. 23% said they moved for reasons related to health. (2)
Pros and Cons
Ideally, downsizers who move into a smaller home enjoy their lives, happily ever after. They have less maintenance and smaller monthly bills because there is less space. They may have a nice addition to their “nest egg” from the profit of selling their old home and buying a smaller, less expensive one. They find it easier to get around. Some even opt for “sea change” and its more relaxed lifestyle.
However, “happily ever after” doesn’t always happen. Some people miss their old homes. There is also the stress and hassle of buying one home, selling another and moving. A lot of the “profit” from downsizing can be negated by taxes and fees. Some people move and don’t like their new home after living in it a few months.
We Can Help
At Approved Financial Planners, we can look at your individual financial situation and help you come up with a firm retirement plan. Call 08 6462 0888 for more information.