Throughout their lives the baby boomer generation has created change. Boomers have done so in areas such as music, eating out, gender roles, workplace practices, health, education and technology. A more recent trend is accommodation.
Once children have left home, a typical baby boomer couple starts to re-consider what they want in life. Do they still want the large family home with garden and pool? Has the appeal of the business rat race dwindled? Do they want to work less or differently and enjoy sports or other leisure activities?
The “sea change” story has been well publicised with people seeking new homes near the coast. But not everyone yearns for water views. Some have opted for city living in apartments close to work, entertainment and cultural centres. Others have moved to the bush – the “tree change”.
If you are thinking of making a change, here are some thoughts to help you plan for a successful transition.
You will need to estimate the expenses your new lifestyle will require. Some costs may be lower (eg. council rates and home maintenance) but others may increase (eg. petrol prices and body corporate fees). The way you choose to live will have a big impact. However well you plan, the unexpected will occur and a cash reserve is essential.
Selling a larger house may release capital to pay off debts or invest. Alternatively, it can be used for travel, buying lifestyle assets or as gifts to family members or charities.
One popular strategy if downsizing releases capital is to boost superannuation, particularly if one spouse has a lower level of savings. Putting money into super means it is concessionally taxed but may not be immediately accessible. Rule changes mean you can access your super as an income stream before you fully retire but this must balance out with how long your funds need to last. Alternatively, you may want to have greater flexibility and invest outside super. Frequent changes to superannuation regulation can make this a confusing option so seek professional advice to make the most of the advantages.
In a new location, two issues are paramount. Will you have access to the facilities you want, such as healthcare, shopping and other amenities? Will you still have contact with family and old friends or will you travel to visit them and vice versa? Other lifestyle choices may involve overseas travel or buying a 4WD, caravan or boat.
fall back planning
One last tip: it is sensible to have a strategy in place if your “dream move” doesn’t work out. For instance, you could rent out the family home initially or rent a place in your dream location before you buy.
These planning issues all involve money. Use us as your sounding board to help you plan wisely.