For many of us, retirement conjures up images of a house by the sea or a few months caravanning around Australia. But there is much more to consider when choosing how and where you want to live when you’ve finished working.
For example, people who want to live in a particular suburb might consider buying a small property in the area years before they plan to downsize.
It always pays to understand your finances before getting your heart set on a major move. Read up on government programs such as the new super boost incentive for downsizers, which allows people 65 and over to put money from downsizing into their superannuation fund.
National Seniors Australia chief advocate Ian Henschke says downsizing or moving out of a lifelong home is often motivated by the need to free up finances for holidays or property. But it can come with unintended financial consequences, such as pension eligibility, stamp duty or bank fees. Advisers can also help you navigate retirement village contracts and leasehold arrangements, which are different from real estate contracts.
“A lot of retirees like to stay within a few kilometres of their local area, where they can stay close to friends or family, and maintain relationships with local doctors,” says Ben Myers, the executive director of Retirement Living at Property Council of Australia.
“Downsizing allows them to free up more time that may have been spent doing home and garden maintenance, to pursue part-time work and leisurely activities, and enjoy the most of life,” says Myers.
Australians over 55 also need to consider access to services they might need more as they age. Public transport to the supermarket, medical centres and other amenities, such as health clubs or community centres, becomes more important as driving becomes more difficult.
Other retirees seek out opportunities outside of their family – through friends, clubs or retirement villages with people in a similar age group.
“People don’t want to think that they are going somewhere to be old. Retirement living is about enhancing someone’s lifestyle,” says Leonard Teplin, director of Marshall White Living. “People don’t want to be left alone. They want to be somewhere where they can socialise, where there is an energy.”