As a seasoned financial adviser, I have had the privilege of assisting numerous individuals in various property transactions throughout the years. While I wish I could pinpoint the ultimate retirement destination for each of you, the truth is that there’s no one-size-fits-all answer.
In this article, I aim to provide you with valuable insights into the considerations and questions you should be pondering as you contemplate your retirement relocation. Drawing from shared experiences and lessons learned, we’ll explore the crucial factors that can help you make an informed decision.
Six decisions you need to make when choosing your retirement location
1. When should you move: now or later?
Timing is everything, especially when it comes to relocating in retirement. Moving while you’re still relatively young can offer both physical and emotional benefits. Not only are you better equipped to handle the process, but you’re also more likely to establish meaningful friendships and find a sense of community. It’s an opportunity to embrace change and embark on a new adventure.
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2. How accessible is healthcare?
While the idea of a sea or tree change might be appealing, it’s crucial to assess the accessibility of healthcare services in your prospective retirement locale. Consider the proximity of hospitals, specialists, and general practitioners. Ensuring convenient medical care is essential for maintaining a high quality of life as you age.
3. Your social network: Where are your family and friends located?
The temptation to follow your children’s footsteps can be strong, but it’s important to weigh the potential pitfalls. Kids often relocate, leaving you far from familiar faces. Additionally, departing from your existing network of family and friends means fewer casual visits, but it may also result in more meaningful, extended visits, especially if your new abode doubles as a holiday destination.
4. Embracing mobility: Stairs or no stairs in your home?
The debate over stairs versus single-level living is multifaceted. While conventional wisdom often leans towards avoiding stairs, personal experiences show that staircases can inadvertently promote mobility and independence. Alternatively, a two-storey home can cater to visiting family or friends, with the upper level transformed into guest quarters. Moreover, installing a lift can mitigate the challenges posed by stairs, providing a cost-effective solution compared to the transaction costs of moving.
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5. Financial considerations and capital release
Your financial goals play a pivotal role in your relocation decision. Releasing capital to fund your retirement requires a careful balance, as it impacts your eligibility for government benefits like Centrelink. Strive for a harmonious blend of financial comfort and lifestyle enhancement, being mindful of the transaction costs associated with moving, which can average around 10% — selling agent fees, legal costs, stamp duty, movers and an allowance for a few little jobs to be done to your new place or getting some new furniture or appliances where your old ones were not going to suit.
6. Choosing your home: What are your dwelling options?
Choosing between an apartment, a home, an over 55’s community, or a granny flat entail contemplating multiple factors.
A. Apartments and Townhouses
Embrace the benefits of community living and reduced maintenance responsibilities. Although body corporate fees may initially seem steep, they often compare favourably to individual maintenance costs. While social aspects thrive, be prepared to accommodate to the proximity of neighbours and potential restrictions.
B. Over 55’s Lifestyle Villages
These communities amplify the communal living experience, attracting those who value age-specific companionship and shared amenities. Yet, the unique property structure, often involving long-term leases, might not align with certain financial strategies like Centrelink and reverse mortgages.
C. Granny Flats
Co-locating with family members offers proximity, potential financial benefits, and mutual support than can extend how long you can live in your home. However, careful planning is essential to navigate. with considerations such as:
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- What is the impact going to be on my Centrelink entitlement and how should the transaction be structured to optimise the outcome?
- While having the family close sounds great will I have the level of privacy and peace and quiet that I want?
- What about if I need to go into residential aged care at some stage? If my “equity” in my home is going to be part of the funding will the kids want or be able to afford to buy it out? What if the kids want or need to move?
- Is it going to cause any friction between the kids now? There have been plenty of times that I have seen one of the other children ask why their sibling is getting a couple of hundred thousand toward them buying a new home or building a granny flat without them thinking about the years of potential help and care that their sibling is likely to be providing.
- What are the impacts on your estate planning and are you comfortable with the outcome.
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Conclusion
Choosing your retirement location is a significant decision, intertwining financial, lifestyle, and emotional considerations. The ultimate destination should reflect your unique needs and aspirations. Engage in comprehensive self-assessment, consult with professionals, and involve your loved ones in the process. Remember, the perfect place for you is one that harmonises with your individual journey into retirement.
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