Expert Advice

Is your home holding back your lifestyle?

B2B Editor15 March 2016

Is your home holding back your lifestyle?

Many Australians that are getting close to retirement have more money tied up in the family home than they have in income producing assets that they will need to fund their retirements with. While the family home is exempt from capital gains tax, it is a non-income producing asset and will require a substantial amount of money to maintain each year to protect the capital value.

The other emerging issue is rates which have risen over 40% in the last three years so the cost of keeping the family home may be unsustainable.

Perhaps look at downsizing into an apartment or a townhouse this will not only give you more free time but also more money to help fund your retirement. Planning for retirement includes where you want to live and the lifestyle to you are looking forward to.

The first step is a chat with your financial planner or accountant to determine your true financial position. Sometimes this can be a very sobering conversation.

The second step is obtaining a realistic market appraisal for the value of your current home. This is a good base for your financial planner or accountant.

The third step is checking out alternative accommodation that works for you now and in 10-15 years’ time. Choosing the right property on your first down size can often result in only moving once. Ideally look for a single level or an apartment block with lift access close to shops and transport so you can still maintain independence even without a car. Remember lifestyle is also very important in your planning.

Once you know what your home is worth and what a suitable replacement will cost, you then have a clear idea of what additional funds you have available to either invest or enjoy.

We recently helped a lady who was looking at retirement and realised, after a conversation with her financial planner, that she did not have enough super to fund her current lifestyle. She down-sized from a large family home to a spacious townhouse both in the inner north and was able to invest around $500,000, buy a new car and take a lengthy holiday.

Often this planning process may take several years. At Maloney’s we are happy to provide you with a pressure free market appraisal which will help you start your planning for the future.For further information regarding real estate in the ACT contact Peter Maloney on 6231 0100 or
[email protected]

Peter Maloney

Contact Maloney’s on 6232 0100
[email protected]