Explore the downsizing upside

AN INCREASING NUMBER OF DOWNSIZING OPTIONS FOR THE OVER 50S PRESENTS CHALLENGES AND OPPORTUNITIES FOR BABY BOOMERS.

According to financial planner and author, Rachel Lane, the sheer number of options for downsizing can cause a bit of stress and confusion.

“Whether you’re talking about strata, retirement villages or land lease communities, there are lots of different rights and responsibilities to understand,” said Rachel. “In the end you’re comparing apples and oranges and pears.”

Taking the time to review your current circumstances, the lifestyle you want to lead in the future and potential assistance you’ll need later in life, will help you decide on the right home to suit you.

“The three factors to keep in mind are in-going, on-going and out-going fees,” said Rachel. “For instance, a retirement village might have a low price to buy in but will have exit fees when you leave.

“Strata title and land lease communities will have on-going fees but in the case of land lease communities, if you’re on the aged pension – and about 80 percent of retirees in Australia will be – then you’ll be eligible for rental assistance on LLC site fees.”

The best-selling book Downsizing Made Simple, written by Rachel and finance expert Noel Whittaker, was updated at the end of last year to include all the latest information about legislation and superannuation changes.

“My best advice is to be really proactive about planning this stage of your life and that includes thinking about your later years where you might need more support,” said Rachel.

“Many people are afraid that will mean moving to a nursing home, however an overwhelming 80 percent of care actually takes place outside of nursing homes.

“That’s why it’s important to think about the type of home that would best facilitate your independence in the long term.

“Strata title units generally aren’t designed to be modified but staying in your old home may not be a good option either. Older homes are expensive to run and maintain, so consider freeing up the equity which you can then put towards investing or having a splurge.”