Debunking perceptions that all empty nesters are cashed up, research by National Seniors Australia (NSA) shows that the widely-held image of older Australians as wealthy and under-taxed is a myth. But there is wealth tied up in family homes.
According to NSA, almost a third of Australians aged over 80 had exhausted their retirement savings, and another quarter of 75 to 79-year-olds were in the same boat. However, retirees can be asset rich. Around 84% own a home.
Further dispelling popular views, it turns out that frugality in retirement is not motivated by the desire to leave an inheritance, but because of caution and uncertainty. The NSA found that while most retirees rated income for life as one of their most important goals, the reality for many is very different.
Understanding the options
Many of the empty nesters Downsizing.com.au speaks with would like to downsize to release the equity in their home and enjoy a lower maintenance lifestyle.
Part of the problem is a lack of awareness about the different housing options available. The NSA found many older people view nursing homes very negatively. As interim CEO of NSW, Professor John McCallum, notes, “Residential aged care throws dark shadows over old age, and who wants to plan for that?”
The thing is, for empty nesters, downsizing can be liberating on several fronts, and it doesn’t have to mean heading into a nursing home.
Downsizing is a chance to boost your super, something the federal government encourages through the downsizer super contribution. It’s also an opportunity to enjoy a new life. One where you can lock and leave an apartment without worries if you choose to travel.
Better yet, many new developments are built with downsizers in mind, and feature the space, quality appliances and extra storage that downsizers often look for.
Time to rethink retirement
Maybe it’s time to rethink what retirement really means. If it’s about holding onto the past and staying in a valuable yet high maintenance home, plenty of Australians could struggle financially, and potentially physically, through retirement.
Viewing retirement through a different lens – one that opens the door of opportunity sounds vastly more exciting. Downsizing your home can be an important step to making the most of this new stage of life.
Greg Oddy is the Director of Sales and Marketing at Downsizing.com.au
13 February 2019