For many Australians, retirement may be an ideal time to downsize or relocate, or both, while freeing up a bit of extra money. Either way, there will be a variety of things to consider.
Financial considerations when downsizing or relocating:
What property and rental prices are like in the area you’re looking at, and if they’re affordable.
How the general cost of living stacks up when it comes to groceries, eating out, transport and health.
What out-of-pocket expenses you might be looking at, such as removalist fees, stamp duty if you’re planning on purchasing a home in Australia, and things like connecting and disconnecting utilities.
Whether the money from your potential property sale could affect the results of income and asset tests for any Age Pension entitlements you may be eligible for.
If you’re 60 or over and eligible, you may want to make a downsizer contribution into super. This allows eligible individuals to contribute up to $300,000 into their super (or up to $600,000 per couple) using money from the sale of their main residence.
Non-financial considerations when downsizing or relocating:
How far the property you’re looking at is located from family and friends, and whether you know anyone in the place you’re thinking of moving to.
What local amenities are nearby, such as supermarkets, restaurants, transport and hospitals.
Whether the area is big on community events and if there are recreation facilities nearby (like parks, libraries, or leisure centres) and club associations you may want to join, like Leagues or Rotary.
What the weather is like throughout the year and whether it’s going to suit you.
How the job market stacks up in case you decide to step back into the workforce.
What the crime rate is like.
If you’re not too sure about some of these things, that’s okay. However, if you are thinking about moving to an area that you’re not familiar with, it might be worth trialling where you’re thinking about moving to, by visiting the neighbourhood a few times, or even taking a short break and renting there for a while.