18 Apr 2019
The Art of Downsizing
Australians are experiencing a major social transformation as the baby boomer group, around 5.5 million people born between 1946 and 1964, are reaching retirement. While they are living longer than ever, it presents a real issue as many of this group simply don’t have sufficient superannuation to fund a comfortable retirement for their projected lifespan and are choosing to re-align their assets to meet with their changing accommodation and income requirements.
According to the Credit Suisse Research Institute Global Wealth Report 2018, Australians have the highest median wealth per adult. Despite this, retired Australians experience high levels of relative poverty and albeit are asset rich yet cash poor with the majority of their wealth tied up in the family home.
It’s worth remembering that when compulsory superannuation was introduced in 1992, many baby boomers were more than halfway through their working life, and they missed out on the benefits of compounding returns over time. As a result, the median household superannuation balance for retiring Australians currently sits around $200,000, estimated to support a ‘comfortable’ retirement income for just 10-15 years.
The government recognised this and in December 2017 introduced the Downsizing legislation from July 2018 allowing retirees to make a contribution of up to $300,000 to Super upon the sale of the principle residence, providing that the contribution is made within a 90 day window after settlement, that the property was owned for a minimum of 10 years and are over the age of 65, for full details visit ASIC MONEYSMART website ASIC MONEYSMART DOWNSIZING.
The Art of Successful Downsizing information sessions
Off the back of this environment and the introduction of the legislation we have enjoyed more conversations on this subject and last week we ran an additional client information session with special guest speakers Lisa Oshlack the founder and Managing director of Moving On, a downsizing, home preparation and re-location specialist specialising in the over 55 Market and Rich Harvey, Managing Director of Propertybuyer and buyer’s agent of Channel 9’s successful Buying Blind series.
The next session we will be holding will be on Tuesday 20th August if you would like to attend please email info@psk.com.au
First published 28 August 2019
