Increasingly, Australia’s empty nesters and retirees are downsizing to take advantage of financial and lifestyle benefits.
And that’s no surprise when you get down to crunching the numbers.
A report in the Australian Financial Review revealed older Australians invested $14.5 billion into their superannuation over the past five years as a result of swapping a family-sized home to something better suited to their current lifestyle.
With more than half of Australians over the age of 55 having downsized, or considering it, according to the Australian Housing and Research Institute, it’s worth taking a moment to think about some of the real benefits of moving to a ‘rightsized’ home.
5 benefits of downsizing
There is one main reason why people look to downsize – they no longer want to rattle around in a big home that is under-utilised and costly to run and maintain – especially on a fixed income.
But is that the only reason?
No, not quite. So, let’s do a deep dive into the benefits of downsizing.
1. Build up your superannuation
One of the big incentives for downsizing is about releasing the equity of your larger home. If you’re over the age of 55, you can access the Federal Government’s Downsizing Super Contribution program and use the proceeds of the sale of your home to boost your superannuation.
This program allows you to put up to $600,000 per couple ($300,000 per individual) from the proceeds from the sale of your home to help ‘supercharge’ your retirement savings.
Reinvesting back into your superannuation gives you more financial freedom to do the things in your retirement years that you want to do, such as more travel.
2. You can increase your cashflow
Downsizing is more than simply putting more money away for your retirement. It can also put cash in your pocket straight away.
And that gives you the freedom to treat yourself to that ‘bucket list’ holiday you’ve always wanted or provide a financial gift to family.
Replacing the large home for one which is more rightsized, that better suits your lifestyle, is much cheaper to run, saves you money on electricity and other utilities, not to mention time saved on cleaning – who doesn’t want that?
Moreover, a new home eliminates the need for costly maintenance and renovation costs – which is money that could be spent on doing more enjoyable things.
3. Start retirement debt free
Almost 90 percent of Australians over the age of 50 fear heading into retirement with a mortgage on their family home, according to a survey by AMP.
This finding was also consistent with the Australian Bureau of Statistics’ data that showed those over 55 had experienced a four-fold increase in household debt levels over the past 20 years.
Making the move to downsize, even before you’ve retired from work, can help clear the slate of debt, reduce household outgoings, and put you in a more sound financial position to enjoy post-work years.
However, it is important to remember before making any decisions that you speak to a professional financial advisor.
4. You can (finally) declutter
So much of our younger adult lives, as we enter the work force and raise a family, is about acquiring wealth and possessions. And as older adults, we’re likely to be surrounded by a lifetime of memories in the form of ‘stuff’ – much of which may not suit the life you lead now.
For some, the thought of decluttering is accompanied with a feeling of existential dread, for others the opportunity to declutter is faced with relish.
Regardless of which side of the ledger you fall on, downsizing is the perfect excuse to begin that decluttering process as part of your transition to retirement and it comes with several advantages too.
If you’ve been the custodian of sentimental family objects, downsizing is a great excuse to pass those items on to the next generation to give them the opportunity to enjoy them now. If they have no interest in those items, then search for someone outside of the family who will appreciate their worth.
Some household objects that you might have been holding onto might have surprising intrinsic value – old electronics and computer games, even your old record collection might hold a few gems for younger generations.
Most of all, decluttering is about simplifying your life thus allowing you to keep the best and ditching the rest.
However, if the idea of decluttering is too stressful, you can even hire professionals to help you.
Learn more about how to emotionally prepare for downsizing.
5. Discover more time and freedom
Spending time cleaning and maintaining a large home – not to mention endless hours mowing lawns, weeding, and cleaning the swimming pool – is not a lot of fun, especially if you have other things you’d rather do.
Downsizing is not just reducing the amount of space you have, or things you own, it is about giving you more time for the lifestyle you want to lead.
Imagine the freedom to say ‘yes’ to adventure and to take off on a fun little road trip at a moment’s notice and not having to rush back home. Perhaps that freedom means checking an experience off your bucket list or trying a new sport or hobby.
Another benefit of having more free time is the opportunity to spend it with family – especially the grandkids – and create precious lifelong memories.
6 extra benefits of downsizing to an over 50s lifestyle resort
Now we’ve gone over five great reasons to consider downsizing, the next question is, where should you downsize?
It’s important to do some research because not all retirement living options are the same.
Traditional retirement villages have retirement expenses such as entry and exit fees, deferred management fees and capital gains fees. Over-50s lifestyle resorts, also known as land lease communities, don’t have any of those charges. You simply purchase your home and pay a modest weekly site fee for which you may be eligible for rental assistance.
Often lifestyle resorts have more sporting and leisure facilities which are ideal for people who are active and independent.
Let’s look at some of the other benefits of downsizing to an over-50s lifestyle resort that you may not have considered.
1. You can rightsize in a modern space
Imagine having the very latest kitchen appliances, ducted air conditioning, and smart home connectivity right at your fingertips. Or perhaps a walk-in pantry with plenty of storage has always been on your wish list.
Downsizing to a new home with all the modern conveniences in a GemLife over-50s lifestyle resort gives you more time to enjoy an upgraded lifestyle where your pets are welcome, and you have the freedom to host family gatherings and overnight visitors.
Learn more about rightsizing your home here.
2. You can enjoy the spirit of the community
One of the great reasons to downsize to a home in an over-50s lifestyle resort is the opportunity to make friends and socialise with likeminded people.
Getting to know your neighbours is easy when there are plenty of community facilities and activities right on your doorstep. And forming strong friendships is much easier when you discover you have so much in common.
3. You’ll feel secure in a gated community
Whether your plans are for travelling for months at a time or indulging in some long-neglected hobbies, knowing that you and your home are safe is important.
Look for a secure, gated over-50s lifestyle resort with vehicle number-plate recognition, on-site management, and homes that have their own security systems, so you have the ‘lock-up-and-leave’ peace of mind to enjoy extensive travels.
Just as important is the security of knowing your neighbours by name and the confidence of counting on their support when you need it.
4. Less maintenance & fewer responsibilities
What would you do if you didn’t have to spend hours keeping the garden, cleaning the pool and doing so much housework?
Moving into an over-50s lifestyle community where professional gardeners and maintenance teams take care of the resort gardens, swimming pools and sporting facilities, gives you more time for all the things you want to do, whether it is travel, more time with family and friends, or discovering new sports and hobbies.
Here’s 8 activities to try in retirement.
5. You can maintain an active, social lifestyle
Luxury lifestyle resorts that are designed for active and engaged people over 50 have extensive social and recreational facilities to hit your health and wellness goals.
Look for resorts that have well-appointed sporting and fitness facilities including gyms, heated swimming pools, tennis and pickleball courts, ten-pin bowling, golf simulators and more.
Even if sport isn’t your thing, you ought to find spacious Country Clubs that have creative arts studios, workshops, music rooms and cinemas in addition to residents’ coffee lounges, bars, and grand ballrooms to provide ample opportunity to enjoy entertainment or try your hand at new hobbies.
6. More financial security
Unlike retirement villages, over-50s land lease community lifestyle resorts have no entry and exit fees, no deferred management fees or capital gains fees. That means the investment in your new rightsized home remains your asset.
Continuing to own your own home, knowing that its value is not being eroded by fees and charges gives you more financial security for the future should you need to fund more advanced care or should you wish to leave a legacy for the family.
Downsize with GemLife over 50s lifestyle resorts
If you’re looking to downsize and don’t know where to begin, start by giving our friendly team a call.
GemLife has resorts in the most sought-after tree change and seachange locations in Queensland, New South Wales and Victoria.
GemLife resorts have outstanding resort facilities that include a wide range of premium recreational and leisure facilities for ultimate wellbeing. Our homeowners enjoy exceptional social, leisure and sporting facilities on their doorsteps.
For more information, speak to our specialist team or request an info pack.
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