Baby boomers are driving the housing market as they sell the family home – and retirement villages are their destination of choice, according to Downsizing with Ease Founder Lorraine Cox.
She’s told 2GB most of her clients downsize to retirement villages to avoid the costs and upkeep of a large family home – and they aren’t waiting to make the move.
“They don’t want to wait until they’re 70 or 80, they can see the benefits in freeing up, going to a smaller place and doing what they’ve wanted to for years,” she said.
Seek financial advice on Pension payments
But will your Age Pension be affected if you do downsize?
While your place of residence is exempt from the asset test, the surplus from any sale could be considered an asset.
As we reported here, there is a new incentive for over-65s who sell a home they have lived in for 10 years or more the chance to make a concessional contribution of up to $300,000 – or $600,000 for couples – into their super.
However your super balance does count towards the assets and income test. If you are thinking of downsizing, it’s worth seeking professional advice from a financial adviser – it could save you a lot of money in the long run.