Why do people consider leaving their home?
- The home is too large
- To free up capital in favour of an ideal lifestyle
- The ongoing upkeep is too much
- Stairs
- Loss of independence
- Passing of a spouse
- No longer feeling safe in current location
- Loss of a driver’s licence or mobility
- Change of scenery
- Centrelink implications
What Options are there?
- Benefits of Staying in the home
Staying in the family home during retirement offers numerous benefits, both tangible and intangible, contributing to a higher quality of life and greater financial stability for retirees. Here are some of the key advantages:
Avoiding Relocation Costs: Moving to a new home, especially in a retirement community or assisted living facility, can be expensive. By staying put as long as possible, retirees can avoid the costs associated with buying several new properties throughout retirement, and the physical and emotional toll of moving.
Familiarity and Comfort The family home is often a source of comfort and stability. It holds memories and a sense of identity, which can be incredibly reassuring during retirement. Familiar surroundings can reduce stress and provide a greater sense of security.
Community Connections: Long-term residents typically have established social networks within their communities. These connections with neighbours, local businesses, and community services provide valuable social interaction and support, which are essential for mental health and well-being.
Sense of Independence: Maintaining residence in the family home allows retirees to retain their independence. They can continue to live life on their own terms, following their routines without the constraints that might come with communal living environments.
Customizable Living Environment: Staying in the family home enables retirees to customize their living environment to suit their needs. They can implement modifications like grab bars, stairlifts, or walk-in showers to enhance safety and accessibility as they age.
Gardening and Outdoor Space: Many family homes come with gardens or yards, offering retirees the opportunity to engage in gardening. This activity not only provides physical exercise but also has therapeutic benefits, promoting relaxation and a sense of accomplishment.
Pet Ownership: For those with pets, staying in the family home means they do not have to part with their beloved animals, which can be a condition in many retirement communities. Pets provide companionship, reduce feelings of loneliness, and can even improve physical health through regular walks and play.
Proximity to Family: Staying in the family home often means being close to family members, especially if children and grandchildren live nearby. This proximity allows for more frequent visits and the ability to provide or receive assistance when needed.
Legacy and Continuity: For many, the family home represents a legacy that they wish to pass on to future generations. By staying in the home, retirees can ensure its upkeep and potentially pass it down, preserving family history and continuity.
Centrelink: There is currently an exemption under the Asset test for the Aged Pension for your family home. This needs to be considered into your calculations when you are looking to downsize. You should seek advice on some projections and cashflow on the effect this will have on your weekly budget.
What if you want to sell?
There will be people who will want to downsize due to size, ongoing maintenance or to free up capital to fund their lifestyle.
How can these people approach this? If you’ve ever bought and sold property, then you know this can be a daunting task.
We would suggest researching agents in your local area who seem to be selling similar properties and arrange a meeting to see if you feel comfortable with them.
When selecting an agent some of the things that you should consider are:
- Their sales history and experience;
- What is their local market knowledge?
- Their reputation;
- Costs of commission;
- Costs of advertising and photography;
- Any other incidental costs;
- Will they negotiate any of their costs?
- Will they require you to remove your existing furniture before photography or will there be a cost to include staged furniture?
- What is their marketing plan considering things like: where will your property be listed? How many open homes will they complete? Etc.
Remember it is your property and it is your outcome that is important, so take your time to do your research on which agent you feel you can trust.
Another thing an agent can assist with is whether they think your house will be lived in by the potential buyer or will it be bought by someone like a developer who will knock it down and redevelop. This will then help determine how much, if anything, you should spend to tidy up your home. There is no point spending a lot and potentially overcapitalising if the house is going to be used as a redevelopment site.
On the other hand, a tidy up and de-clutter can add a lot of value if it will be purchased for someone to live in.
Auctions: Many retirees aren’t keen on auctions as they can be a daunting process.
There are an increasing number of agents who use auctions now to simply have someone come to the negotiating table. It is frustrating from a buyer’s perspective, and I personally dislike the technique used by agents where they cannot tell you the price due to auction, saying they have not discussed prices with the seller. Agents are bound by rules.
Personally, I think they are far too quick to go to auction rather than having a list price.
Tips
- Interview a number of local agents.
- Decide who is likely your target buyer and don’t overcapitalise.
- Beware expensive campaigns for marketing. Most people will search a local area online anyway.
- You need to have realistic expectations on what your property is really worth.
- Ask the agent is there is anything they feel you could do to help the sale process run more smoothly.
I asked Local Professional Principal Luke Henderson a few questions about what to consider when selling
What tips do you have for someone that is considering selling?
Most Lifestyle villages will allow you to ‘hold’ a property for a period of time to allow you to sell, so if you can’t sell you aren’t obligated outside a small ‘hold’ fee so it’s a very fair and less pressured way to buy / sell.
At what point should they contact an agent?
Before looking, so they can have a rough estimate on what their own property is worth and then again once they secure a property to buy.
Should they be scared of Auctions?
For selling, no – it’s how most property is transacted in the current market and buyers from NSW and Vic are very comfortable with the process and the key to selling and getting most out of buyer is to make they feel comfortable.
What sort of marketing should they expect?
No more then $5000 – usually you can pay these out of settlement proceeds for a small fee.
Other tips or thoughts?
Don’t pick an agent because they have told you the highest appraisal price. Discuss process and make sure there is a good level of trust between you and who you pick as once you sign the paperwork you are on the roller coaster ride where you only have so much control of the situation, where the agent has a lot of control.
Market Timing thoughts?
You need to do this when the timing is right for you. Lots of people try and time markets. In reality, you are buying and selling in the same market.
Your recent experience:
When you have made the decision then get the family involved. Make the move while you are active and able to move to an area that you know. If you move earlier than you think you can embrace the new change.
Downsize to a Unit
This may be smaller than the family home and feel more secure. It may even be a gated community. It will have less upkeep as some of the outside maintenance may be done by the body corporate. It can also provide a sense of community which can be good or bad.
Moving into a unit during retirement can offer numerous benefits, significantly enhancing the quality of life and ensuring better support as one ages. Here are some key advantages:
Financial Benefits
Lower Maintenance Costs: Units typically require less maintenance compared to single-family homes. The smaller space and shared responsibilities for building upkeep mean that retirees spend less time and money on maintenance tasks, allowing them to enjoy their retirement more fully.
Predictable Expenses: Many retirement units come with fixed maintenance fees that cover a variety of services, such as landscaping, repairs, and building insurance. This predictability helps retirees manage their budgets more effectively without the worry of unexpected expenses.
Downsizing Opportunities: Moving into a unit often means downsizing, which can be a liberating experience. It encourages retirees to declutter and simplify their lives, keeping only what is necessary and cherished. This process can lead to a more organized and stress-free living environment.
Access to Amenities: Many retirement units are part of communities that offer a wide range of amenities, such as fitness centres, swimming pools, social clubs, and recreational activities. These amenities provide opportunities for exercise, hobbies, and socialization without leaving the community.
Convenient Locations: Retirement units are often strategically located near essential services such as healthcare facilities, shopping centres, and public transportation. This proximity ensures that retirees can easily access what they need, reducing the reliance on personal vehicles and enhancing their independence.
Increased Security: Retirement communities often feature enhanced security measures, including gated entrances, surveillance cameras, and on-site security personnel. This added layer of security can provide peace of mind for retirees, knowing that they live in a safe environment.
Emergency Support: Units in retirement communities are usually equipped with emergency call systems, ensuring that help is readily available if needed. This immediate access to emergency assistance can be crucial in ensuring the health and safety of retirees.
Community and Socialization: One of the most significant advantages of moving into a unit is the sense of community it offers. Living among peers in similar life stages fosters social interaction, combats loneliness, and helps build a supportive network of friends.
Independence: By moving into a unit, retirees can maintain their independence longer. They can manage their daily activities without relying heavily on family members, reducing the emotional and logistical burden on loved ones.
Peace of Mind for Family: Knowing that their retired loved ones are living in a secure, supportive environment can provide significant peace of mind for family members. It assures them that retirees are well-cared for and have access to the necessary resources and assistance.
Retirement Villages or Over 50’s villages
Retirement villages or Over 50’s villages are likely to provide a greater sense of community than merely downsizing into a unit, because they bring together people who are of similar life-stage with the particular goal of enjoying the community activities such as bowls/tennis/croquet etc. Although this particular aspect of retirement villages and over 50’s villages overlaps, the two are quite different from a financial perspective, and actually run under two different sets of legislation.
A Retirement Village will generally be a leasehold arrangement (although there are variations on this) whereby you purchase the right to reside in the property for an extended period of time, and when you leave the village, there will be a Deferred Management Fee deducted from the ingoing contribution that was paid. In addition, there are ongoing weekly fees to maintain the communal facilities.
An Over 50’s village is run under the Manufactured Homes (Residential Parks) Act and can sometimes be called a Land Lease community. Within these communities you would own the actual house but leave the site on which the house sits. The weekly payment of site fees can qualify one for rental assistance if you receive an Age Pension or part Age Pension.
Moving into a retirement community offers a wide range of benefits that can significantly enhance the quality of life for retirees. These benefits encompass physical, emotional, and social aspects, ensuring a supportive and enriching environment during the later stages of life. Here are some of the key advantages:
Enhanced Social Life and Community Engagement
Built-in Social Network: Retirement communities provide a built-in social network of peers who are in similar stages of life. This environment fosters friendships and a sense of belonging, reducing feelings of loneliness and isolation that can be common in traditional housing.
Organized Activities and Events: These communities often offer a diverse range of organized activities, such as fitness classes, arts and crafts, group outings, and educational seminars. These activities encourage active participation, lifelong learning, and help residents stay physically and mentally engaged.
Community Spirit: Living in a community with shared interests and common spaces fosters a strong sense of community spirit. Residents can easily find people to share hobbies and interests, participate in communal activities, and contribute to the community, enhancing their overall sense of well-being and purpose.
On-site Amenities: Many retirement communities come equipped with a variety of on-site amenities such as swimming pools, fitness centres, libraries, and dining facilities. These amenities provide convenient access to leisure and wellness activities without the need to travel far, making it easier for residents to stay active and engaged.
Healthcare Services: Proximity to healthcare services is a significant benefit. Many retirement communities have on-site healthcare facilities or partnerships with nearby medical centres. This ensures that residents have easy access to medical care, routine check-ups, and emergency services, providing peace of mind for both residents and their families.
Transportation Services: Retirement communities often provide transportation services for residents, making it easier to attend medical appointments, run errands, or participate in off-site activities. This service supports independence and reduces the stress associated with driving.
Enhanced Security Measures: Retirement communities typically offer enhanced security measures such as gated entrances, security personnel, and surveillance systems. These measures ensure a safe living environment, allowing residents to feel secure in their homes.
Emergency Response Systems: Many communities are equipped with emergency response systems that allow residents to call for help at the push of a button. This immediate access to assistance can be crucial in emergencies, providing an additional layer of safety.
Reduced Responsibilities: One of the most appealing aspects of retirement community living is the maintenance-free lifestyle it offers. Residents are relieved from the burdens of home maintenance, yard work, and repairs. This allows them to focus on enjoying their retirement years without the stress of managing a household.
Simplified Finances: Retirement communities often offer predictable monthly fees that cover housing, utilities, amenities, and sometimes even meals. This simplifies budgeting and financial planning, providing residents with a clear understanding of their monthly expenses and reducing financial stress.
Potential Cost Savings: Although the initial cost of moving into a retirement community can be significant, the comprehensive nature of the services provided can result in cost savings over time. This is especially true when considering the costs of home maintenance, healthcare, and transportation in a traditional living situation.
Wellness Programs: Many retirement communities emphasize wellness, offering fitness programs, healthy dining options, and access to wellness professionals. These programs support physical health, mental well-being, and overall quality of life.
Holistic Approach to Aging: The holistic approach to aging adopted by many retirement communities ensures that residents’ physical, emotional, and social needs are met. This comprehensive care model promotes a balanced and fulfilling lifestyle.
What are the Benefits to downsizing?
- Downsizing can provide an opportunity to add funds into your retirement savings pool, and may therefore provide the opportunity to enjoy more lifestyle benefits, like added travel.
- A smaller property within a community environment (whether that’s an apartment block or a unit complex or a retirement village) can be easier to lock up and go travelling, because there are close neighbours to keep an eye on things.
- You may have the benefit of communal facilities like swimming pools etc without the physical upkeep.
- There may be organised community events that allow for a fuller lifestyle and less loneliness
- You may have chosen a community that has some care available for when you need help with things like cleaning, washing or meal preparation
- You may benefit from the feeling on increased security
At what point in a health situation should you consider moving?
There is no rule for when the best time is to move, but awareness of our increasing care needs and the ability to confront this with an open mind can assist us to access the services that could be of benefit.
Accessing some home care can significantly increase the amount of time that we’re able to live independently at home and reduce the likelihood of a crisis point where there is a fall with a trip to hospital that can result in less choices being available.
How to access Advice?
Legal Advice
You will need a lawyer to help with the sale process. You will also then need help with the contracts for purchase as well. If you move into an over 50s or lifestyle community you want to make sure you receive legal advice to know what you are signing up for.
Strategy Advice
We have RFS Aged Care – This service is designed to help people that are considering selling and moving into aged care or even a retirement village. Our team can discuss cashflow and Centrelink considerations that you should consider as part of this decision.
RFS Advice – This service will help people manage their ongoing cashflow needs. We will help manage the wealth for our clients and identify a relevant and sustainable ongoing income plan. You can come in and discuss the benefits of these ideas before you need to commit to selling.
Real Estate
Interview a number of local agents under the conversation that you are wanting to know how much your house was worth if you considered selling it. I would start with that approach as compared to calling them up and saying you want to sell your house.
Ask fiends that have been through this
Ask friends that you know have been through this as they may have a team they worked with that they are happy to recommend (or avoid).
Remember it is your Property so do not let anyone bully you into anything.
Ask Troy a Question.
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