When it comes to making retirement plans, the discussion of downsizing is bound to come up. But what are the pros and cons of downsizing?
Whether or not to sell the family home is not an easy decision to make.
There are a lot of factors to consider – financial and emotional – before making such a big decision.
In this article, we take a deep dive into the pros and cons of downsizing to help you make an informed choice based on your personal circumstances.
Firstly, What is Downsizing?
Discussion about downsizing is all the rage now.
With stratospheric house prices and fewer options for young families to get on the property ladder, there has been increased attention on older Australians living in larger homes.
It is an issue the federal government is beginning to investigate and has recently passed legislation that incentivises older people – particularly those eligible for the aged pension – to rightsize their homes.
The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 gives pensioners a 24-month asset test exemption on the sale of their house. This gives people more time to purchase a new home before their pension is affected.
At the same time, people over 50 don’t want to live in a shoe box either.
An Australian House and Urban Research Institute 2020 study discovered that 73 percent of over 55s who haven’t downsized had ‘spare’ bedrooms with 80 percent of that group preferring it that way.
And yet, a combined 55 percent of Australians over the age of 55 have either downsized or are considering it.
So, what options are there to release family-sized homes into the market without compromising comfort and lifestyle?
What are the Pros of Downsizing?
Let’s leave the big picture aside and explore more personal and immediate advantages to downsizing.
Lower Cost of Living
A home which has been rightsized for the way you’d prefer to live costs less to run than a family-sized home.
In the case of over 50s lifestyle resorts like GemLife, the homes have been designed to be thermally efficient and features the latest technology in heating, cooling as well as energy-saving kitchen appliances. The residences also come ready with solar.
All of this adds up to saving a lot of money on your utilities.
But it’s also the little things which add up to big savings. Resort-style living often comes with access to sporting facilities and gyms, along with ten-pin bowling, golf simulators, private cinemas and resident-run lounge bar. This means you can enjoy a more elevated lifestyle with very little on-going expense.
Less Maintenance
Life is too short to spend mowing the lawn, cleaning the pool and washing the windows! So, it’s no surprise to hear that a quite common reason to downsize is finally putting an end to the time and expense of keeping a large home and garden.
Rightsizing to a home in an active over 50s lifestyle resort means there is someone else to maintain the community gardens and facilities which gives you more time to do the things you want to do.
You Can Choose Your Location
Have you ever dreamed of morning strolls along the beach? Or perhaps watching the sun go down over the hills and enjoying the fresh mountain air is more your thing.
Many people who downsize to a resort like GemLife describe it as like being on holidays every day. Downsizing from your current home gives you the freedom to find a location that suits you and the lifestyle you’d like to lead during the next stage of your life.
Look for a locality that has a great range of services nearby, as well as public transport links to major centres.
We have articles on what to look at when considering a seachange or a tree change.
Refresh Your Lifestyle
One of the wonderful things about downsizing is the opportunity to reinvent yourself. This is your time to do more of the things you’ve always wanted to do.
More travelling? Downsizing to a gated over 50s lifestyle resort gives you the lock-up-and-leave peace of mind to enjoy extended adventures knowing your home is secure.
Other people take the opportunity to improve their fitness, return to long-neglected hobbies – even start new ones!
Most of all, over 50s are enjoying a whole new lifestyle filled with new friends and plenty of things to do.
Less Stress
Say yes to less stress. Downsizing to a community where you have good friends and neighbours, as well as being close to family, improves your emotional and mental wellbeing.
Look for an over-50s lifestyle resort that offers opportunities to socialise with like-minded people and welcomes you to entertain family and friends whenever you wish.
Let’s not forget pets – they are an important part of the family and where you live should make them feel welcome too with facilities that include plenty of walking trails for leashed walks as well as an off-leash area that allows your pet to socialise.
Reduce Your Financial Burden
Selling your family home for one which has been especially designed for over-50s living also comes with financial advantages by unlocking the equity which you can use to fund your retirement plans or use to give your family a helping hand.
That, combined with reduced ongoing bills, means you can enjoy a comfortable lifestyle with confidence.
Learn more about downsizing for pensioners here.
What are the Potential Cons of Downsizing?
This article has covered many of the upsides of downsizing.
Are there any disadvantages?
In truth, the disadvantages, if any, are very few if you’ve taken the time to:
- Carefully weigh your financial circumstances
- Explore the differences between retirement villages and lifestyle resorts
- Determine the type of lifestyle you want to lead, and
- Decided where you want to live
- It can take an emotional toll
But there are some things you should keep in mind as part of a decision to downsize.
Learn more about how to mentally cope with downsizing here.
The Readjustment Period
Downsizing is a big decision. Leaving a family home where so many memories were made and where everything is so familiar is not an easy one.
It’s so easy to fall into a routine. Adjusting to a new location and lifestyle does take time to get used to.
Don’t rush the process. It’s quite natural.
Spend some time to get to know the new area – even before you move. Become a local and explore the many things to see and do in the region. This will help you create a feeling of excitement and anticipation for your new home.
Letting Go
How do you downsize a lifetime’s worth of possessions and memories?
It might be easier than you think.
Your memories will always be with you, but there is always a way to streamline the number of photo albums and videos you’re taking with you, like turning it into a digital library. we have a great article here on how to turn your album into lasting digital media.
Downsizing personal possessions is a fantastic opportunity to really prioritise what’s important. Some precious heirlooms could be handed on the next generation, giving you the pleasure to see them used and enjoyed.
But in truth, many possessions are simply ‘things’ without a lot of sentimental value. Consider using downsizing as an opportunity to streamline what you own.
Learn more about how to organise your downsizing move here.
The Stress of Selling Your Home
Selling your home is stressful – there’s no getting around it.
But there are things you can do to make the process a little less painful.
Work on decluttering your home. It not only prepares you for the move to your new home, but also helps you to ‘stage’ your home in preparation for sale.
Ask around for recommendations when it comes to selecting your real estate agent. Also, do your homework on the fees and charges that come as part-and-parcel of selling property.
Best of all, if you’re buying a GemLife home you’ve got the peace of mind knowing there is no entry fees and, if you later decide to sell, there are no hidden surprises like exit fees, deferred management fees, capital gains fees and costs associated with traditional retirement villages.
Explore the GemLife Difference
GemLife is a dynamic, innovative developer of premium over-50s lifestyle resorts, creating vibrant communities that reflect the rapidly evolving demands of Australia’s over-50s.
With a focus on high quality, active and engaged living, GemLife delivers master-planned communities with exceptional recreational and leisure facilities, together with high-quality modern and stylish homes.
Our resorts are in some of the most sought-after retirement destinations in Australia. Call our team today for more details and free information pack. We can also book an exclusive tour to one of our resorts.
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