Downsize without compromise – ‘Rightsize!’ 

September 23rd 2024 | Categories: Retirement |

Downsizing and moving out of your family home is a major life decision. Rather than considering only the financial benefits and implications when deciding to downsize, we invite you to downsize without compromise and ‘rightsize’.  

As retirement approaches and children leave home, many people start thinking about downsizing their homes. The idea of moving into a smaller, more manageable space can seem like a practical and financially smart move. Downsizing often reduces the upkeep and costs associated with a large family home, and there are also financial incentives, like contributing up to $300,000 from the proceeds of your home sale into your superannuation fund (if you’re 55 or older and meet eligibility criteria)¹. However, selling your family home is a major life decision, and it’s important to weigh more than just financial benefits before making the move. 

But what if downsizing isn’t quite what you need? What if, instead, you’re better off “rightsizing”? 

What Is Rightsizing? 

While downsizing is focused on reducing the size of your home, rightsizing is about finding a home that fits your new lifestyle. It goes beyond just financial considerations and takes into account factors like happiness, convenience, and whether your new home supports the life you want to live. Rather than just moving to a smaller space, rightsizing ensures that your new environment aligns with your personal needs and future goals, helping you live your best possible life. 

Rightsizing asks you to consider what really matters in your home and community, making sure you are in the right place for the long term, rather than just focusing on reducing size or costs. 

Common Traps to Avoid Before Moving 

When thinking about selling your family home and moving elsewhere, it’s easy to fall into a few common traps. Avoid these to ensure that your decision is well-thought-out and right for your long-term happiness: 

1. The holiday love affair 

It’s easy to fall in love with a holiday destination and dream of living there permanently. However, living somewhere full-time is often very different from visiting on vacation. Before committing, consider spending a few weeks or even a month living in your potential new location. Utilise short-term rental services, such as an AirBnB, to live like a local and see if the area really suits your day-to-day lifestyle. This trial period can save you from costly legal fees, moving expenses, and the hassle of changing your mind later. 

2. Not keeping it real 

While it’s important to dream about your ideal retirement, it’s just as crucial to ground those dreams in reality. For example, the cost of living in your dream location may be higher than you expect, which could eat into your retirement savings more quickly. Additionally, if you have health concerns, check whether suitable healthcare services are available nearby. Make sure your new neighborhood meets all your physical, financial, and lifestyle needs before committing. 

3. Short term gain, long time pain 

Even if your new location seems perfect for now, consider how it will suit you in the long term. Are you close enough to family, specialised healthcare facilities, or an airport if you plan to travel? Think about whether there are clubs or social groups you can join, and whether the community is equipped to meet your needs as you age. Planning for these practicalities can save you from the hassle of moving again in the future. 

What Should You Consider When Finding the Right Home? 

There are four main elements to focus on when rightsizing: geography, connection & community, engagement & activities, and vitality. Each of these plays an important role in determining whether your new home will meet your needs in retirement. 

1. Geography 

Consider the climate and scenery you prefer. Are you a beach lover, or do you prefer mountain views? Do you like living in the center of the action or in a quieter area? Think about the style of home and neighborhood that suits your lifestyle. Do you enjoy dining out or shopping? These are all important geographical factors that will affect your day-to-day happiness in retirement. 

2. Connection & Community 

Is the location close to family and friends you want to spend time with? If you love entertaining, does your home have the space to host guests? Are there enough opportunities for socialising and making new friends? Also, consider whether the community is pet-friendly if you have or want pets. A strong connection to the people around you is key to happiness in retirement. 

3. Engagement & Activities 

This chapter in your life is all about spending time doing the activities that bring you joy. Does the area offer opportunities to pursue your personal goals or hobbies? Are there cultural or philanthropic activities nearby that interest you? Proximity to theaters, museums, or even an airport might be important if you plan to travel frequently. Make sure the area supports the lifestyle you envision for yourself in retirement. 

4. Vitality 

Staying healthy and active is important in retirement, so make sure your new location offers opportunities to exercise and stay fit. Are there walking trails, gyms, or nature parks nearby? Can you easily access good healthcare services? It’s also important to think about finding the right balance of peace and quiet to support your mental and physical well-being. 

Still Feeling Unsure? 

Making the right decision about your home takes time. Talk to your family and friends, and take the time to reflect on what truly matters to you. By focusing on what will make you happy and comfortable, you can make the decision that’s right for your unique needs and ensure your retirement is fulfilling and enjoyable.  

Even though it is important to not consider just the financial aspects of a move, it will often play a big part. Our trusted advisers, and team of lending experts can help guide you through this process, as you enter into the next phase of your retirement. 

_{[1] Downsizer super contributions | Australian Taxation Office (ato.gov.au)}

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What you need to know: This information is provided by Invest Blue Pty Ltd (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relation to products and services provided to you.