Downsizing the family home in retirement - what you need to know
Did you know that older Aussies can put up to $300,000 into their super using the money from the sale of their main residence, regardless of caps and restrictions that otherwise apply.
The talk of rising house prices has led to people feeling it’s a sellers’ market and maybe it’s time to give up the larger home for a cheaper, more manageable dwelling.
Boosting your retirement savings
If you decide to downsize, have you thought about what to do with the sale proceeds?
If you’re aged 65 or over, and are looking to boost your retirement savings, you can make a tax-free contribution to your super of up to $300,000 using the proceeds from the sale of your main residence.
A downsizer contribution is also unique. It's treated as neither a concessional contribution nor a non-concessional contribution, so it is not subject to either of those caps.
If you do downsize, it pays to know the details
If eligible, you only have 90 days from the settlement, so you need to act quickly.
The criteria includes (but is not limited to):
- You must be over 65,
- Have owned the home for 10 years or more and
- It must have been your home for part of that 10 years.
You can put in up to $300,000 per person but you can’t put in more than the value of the sale; for instance, if you and your spouse sold a home for $500,000 you can’t put $300,000 each, but you could put $250,000 each (subject to meeting the other criteria).
Financial advice that adds real value to your retirement
It is absolutely worth seeking advice from a Certified Financial Planner as to what your financial options are regarding downsizer contributions.
WLM Financial offers a single-team approach to help you across your entire financial life: business and personal, accounting and financial planning. Find out more about our range of Financial Planning Services, Retirement Planning, Or Accounting Services. Or book a meeting for a friendly follow-up to discuss your financial needs.