Renae Diggles

October 7, 2020

Tips For Downsizing in Retirement

Renae Diggles

October 7, 2020

For those of you thinking of downsizing in retirement, there are many options to consider.  As Australians are an ageing population, many people are looking at alternatives to traditional retirement paths. People are considering all the options that retirement living has on offer.

Whether it’s downsizing and moving into a retirement village or an apartment, the choices along the way will alter your experience. With some helpful tips and advice, the transition of downsizing into retirement living will hopefully be a positive one.

Looking at Location

Have you thought about where you’d like to move to? Some people dream of retiring along the ocean with long afternoon strolls along the beach, and sunny cafe breakfasts.  Others dream of moving into something a little more upmarket than their previous home, with everything at their fingertips. There’s much to think about when you consider moving. Staying physically connected with family and friends is really important for many retirees. If you choose to move further away, you might want to consider how easy it is for friends and family to visit. Looking at having an extra bedroom and bathroom is an option if you’re moving afar. Also,  other options to consider include the surrounding infrastructure. For example, are there transport services & shopping villages nearby?

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Your Changing Needs as You Age

With some forward-thinking, the property that you downsize into can be your forever home where you’ll be able to age in place for the rest of your life. In order to do this, however, you’ll want services at your fingertips. Look at the transport options available. Also, consider whether there are pharmacies and medical facilities in close proximity. And will you have to travel far for social activities, entertainment and grocery shopping?

Another consideration when looking at the surroundings is personal safety. If you are downsizing, really take note of factors such as lighting. If you move into a dimly lit village this could be hazardous. And if you’ll be walking around, take a look at pathways and streets to see if they’re well maintained. Also factor in that your body will likely have extra aches and pains as you age. If there are a lot of stairs to navigate, or you have to walk through long corridors to get anywhere, this could impact you in the future.

Last but not least, when looking at a new location to live in, consider the safety and security of the place. Also, consider the safety of the neighbourhood. The last thing that you want is to be living in fear when you’re venturing out in your suburb. Physical safety is always a priority.

Imagine Your Retirement Life

People work hard their entire lives and therefore they deserve a positive retirement life. By downsizing in retirement, people typically have more free time. This is because they no longer need to maintain a large home and a big Aussie backyard. In fact, many places that you’ll downsize into will be half the size of the family home, with no yard. With all the free time you’ll have in retirement, you’ll want to enjoy time with pets, grandchildren and other friends and family. Moving into a place that accommodates pets and has room for the family to visit, is therefore really important for many retirees.

Many retirees will move into a place on their own, but life changes along the way. You could meet a new partner, or have a family member in need who comes and stays with you. Unfortunately, some retirement villages won’t allow such changes, so be sure to check this before you buy anything if you think for any reason that your circumstances could change.

Also consider that as you age, your health changes and your body doesn’t necessarily work the same as it once did. In order to maintain quality of life, home modifications might be required to allow you to age in place. Unfortunately, some properties don’t allow such changes. So it’s really important to be forward-thinking when choosing a place and be sure to pick one that allows you to make modifications as circumstances change.

The Costs Involved With Downsizing

Although you’ll likely have surplus funds from the sale of your home, you don’t want these to be eaten up by unforeseen costs. When you move, there are several fees and costs, such as real estate fees and legal costs.

There are also costs involved in moving into units, retirement villages and over 55’s villages. Different types of retirement villages have entry fees and ongoing fees too. By finding out about all of the costs involved, you’ll ensure that there are no unexpected costs when it comes time to move.

moving boxes

Moving Costs Involved in Downsizing

Moving fees can add up, but with some pre-planning, the cost of removalists can be significantly reduced. For those who’ve decided to stay close by, removalists typically charge by the hour. For those moving further away, the charges are usually calculated by cubic metre. In either instance, the less you have, the cheaper it will be. And besides, if you’re downsizing you won’t be able to take everything with you. This could save you hundreds, even thousands of dollars in moving fees. Also, if you sell off items that are too large or that you no longer want, you’ll have extra money coming in from the sale. Alternatively, you could look at keeping your belongings within the family and gift them to family members, such as grandchildren who are starting out.

Taking items that won’t fit will be problematic when you get to the other end. With this in mind, before you decide to take anything with you, inspect your new property and take a tape measure with you. Mark out where your belongings will go and decide whether there’s space for them.

Moving Impacts on Centrelink Benefits

For those of you who are fully self-funded retirees, this won’t apply to you. But for anyone who’s in receipt of a Commonwealth government benefit, the sale of your family home can impact your benefits. Especially when there are surplus funds from the sale. Whenever your circumstances change, it is advisable that you notify Services Australia immediately. You can call them on 132 300 to discuss your Centrelink Aged Pension and the sale of your property.

Financial Advice When Downsizing in Retirement

When you decide to downsize in retirement, there’ll likely be surplus funds from the sale of your home. With this in mind, it’s recommended that you seek financial advice to discuss your future financial plans. By engaging with a financial adviser you’ll receive guidance and support regarding your investment options and future financial plans. This will aid in providing good quality of life and financial freedom in the retirement years.

For further information, consider reading the following related articles:

Understanding the different types of retirement villages
Planning for life in retirement

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