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By VANESSA STOYKOV FOR DAILY MAIL AUSTRALIA Published: 22:18 BST, 5 April 2025 | Updated: 22:18 BST, 5 April 2025
Dear Vanessa, My wife and I are in our early 60s, and we’re grappling with a decision that’s weighing heavily on us. We’ve lived in our family home for over 30 years. It’s filled with memories, and while our kids love it, they’re rarely home now. They’ve both moved interstate and only visit a few times a year.We’re starting to wonder if it’s time to downsize. The house is getting harder to maintain, and with the rising cost of living, it feels like a lot of money is tied up in a property that’s too big for just the two of us. We’d love to free up some equity to travel and enjoy life more while we’re still active.But at the same time, we’re worried about making the wrong decision. We know that if we sell, we may never be able to buy back into the area. And while downsizing sounds sensible, we’re not sure if it will really give us the financial freedom we’re hoping for.We’re also concerned about the potential impact on our age pension. If we sell and have extra money in the bank, will that affect our eligibility? And is there a way to structure things so that we don’t lose too much in fees and taxes?We’d love your thoughts on whether downsizing is the right move – or if staying put and waiting a few more years might be the smarter choice.Best regards,Greg. Leading money educator Vanessa StoykovDear Greg, You’re not alone in facing this dilemma – many couples in their 60s are grappling with whether to downsize or stay in the family home. It’s a big decision, and there’s a lot more to consider than just the financial side.Let’s break it down.THE EMOTIONAL TIESIt’s natural to feel attached to the home where you’ve raised your family. Even if your kids are rarely home now, the emotional pull can be strong. But ask yourselves: Does staying in the house still bring you joy, or is it becoming a burden?FINANCIAL IMPLICATIONSDownsizing can free up equity that could be used to supplement your retirement lifestyle. However, if you sell your home and end up with a significant amount of money left over, that could impact your age pension. Centrelink treats the proceeds from selling your home as exempt for the first 12 months if you plan to buy another home, but after that, the money is assessed as part of your assets. This could reduce or even eliminate your pension.ONGOING COSTS AND LIFESTYLE Think about the ongoing costs of maintaining your current home versus the potential savings from downsizing. Would moving to a smaller home or a retirement community reduce your expenses and allow you to enjoy more of your money now?MARKET TIMING AND FUTURE PLANSIf you sell now, you may get a high price in the current market, but it’s true that buying back into your neighbourhood later could be difficult. If staying close to family and friends is important, you may want to explore downsizing options in the same area or consider a smaller, more manageable property nearby.THE DOWNSIZER SUPER CONTRIBUTIONIf you do decide to sell, you may be able to make a downsizer contribution to your super. This allows you to contribute up to $300,000 each from the sale of your home if you’re over 55. This could help boost your retirement savings while keeping the funds in a tax-effective environment.WHAT’S NEXT?To make the best decision, I’d strongly recommend speaking with a financial adviser. They can help you run the numbers, assess the impact on your pension, and explore whether a downsizer contribution could work for you.If you’d like to explore your options further, I offer a free referral service to connect you with a trusted adviser who can guide you through this process. This decision isn’t just about money – it’s about designing the next phase of your life in a way that feels right for both of you.Warm regards,Vanessa
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FLOURISHING AFTER 50: We’re in our 60s, our kids have moved out and the family home is too big. Should we sell and downsize, or hold onto it?
