Dear Vanessa,
My wife and I are in our early 60s and we are struggling with a decision that weighs heavily on us. We have lived in our parental home for more than 30 years. It is filled with memories, and although our children love it, they are now rarely at home. They both moved the Interstate and only visit a few times a year.
We start to wonder if it's time to reduce. The house becomes more difficult to maintain, and with the rising costs of living, it feels like a lot of money is tied in a home that is too large for only the two of us. We would like to free up some equity to travel and enjoy life more while we are still active.
But at the same time we are worried about making the wrong decision. We know that if we sell, we may never be able to buy in the area again. And although it sounds wise, we are not sure if it will really give us the financial freedom we hope for.
We are also worried about the potential impact on our age pension. If we sell and have extra money in the bank, will that influence our suitability? And is there a way to structure things so that we do not lose too much in reimbursements and taxes?
We would like your opinion about whether reduction is the right move – or whether we will stay in place and wait for a few years, the smarter choice can be.
Kind regards,
Greg.
Leading money trainer Vanessa Stoykov
Dear Greg,
You are not the only one on this dilemma – many couples in the 60s struggle with shrinking or staying in the parental home. It is a big decision and there is much more to consider than just the financial side.
Let's break it down.
The emotional tires
It is of course to feel attached to the house where you have raised your family. Even if your children are rarely at home now, the emotional attraction can be strong. But ask yourself: staying in the house still brings you joy, or is it becoming a burden?
Financial implications
Downsizing can free the equity that can be used to supplement your pension lifestyle. However, if you sell your house and remain a considerable amount of money, it can affect your age pension. Centrelink deals with the proceeds from selling your house as exempt for the first 12 months if you are planning to buy another house, but then the money is assessed as part of your assets. This can reduce or even eliminate your pension.
Current costs and lifestyle
Think about the current costs for maintaining your current house versus the potential savings of Downsizing. Could moving to a smaller house or a pension community reduce your expenses and you can now enjoy your money more?
Market Timing and Future Plans
If you sell now, you can get a high price in the current market, but it is true that it can be later to buy back in your area. If you continue to be close to family and friends, you may want to explore shrinking options in the same area or consider a smaller, more manageable real estate in the neighborhood.
Down Sizer's Super -Downsizer
If you decide to sell, you may be able to deliver a downsizer contribution to your super. This allows you to contribute every up to $ 300,000 from the sale of your house if you are over 55. This can help you increase your pension savings and at the same time keep funds in a tax -effective environment.
What is the following?
To make the best decision, I would highly recommend speaking with a financial adviser. They can help you carry out the figures, assess the impact on your pension and to investigate whether a Downsizer contribution could work for you.
If you want to further explore your options, I offer a free referral service to connect with a trusted adviser who can guide you through this process.
This decision is not only about money – it is about designing the next phase of your life in a way that feels good for both of you.
Warm greetings,
Vanessa
