1. Refinance for retirement
For many retirees, their home is their biggest asset. Refinancing allows you to tap into this sizeable nest egg to consolidate debt, reduce expenses or increase cash flow for a happier retirement.
According to a government retirement income review, one in 10 Australians enter retirement still owing money on their mortgage. If this is you, you may choose to extend the life of your loan or reduce the interest rate, effectively lowering your monthly payments to give you extra money to spend elsewhere. Or you can do the reverse: reduce your loan period and make larger repayments to pay it off sooner.
If you have equity in your home, a reverse mortgage allows you to release this equity to serve as an income stream. You might use this money to partially fund your retirement, pay for medical costs or make repairs around your home to increase its resale value.
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2. Future-proof Renovations
If you’d like to stay living in the family home – so many memories! – a renovation allows you to continue enjoying it for decades to come.
Renovating gives you the opportunity to reimagine your home to better suit your life in retirement. For instance, if you’re a keen entertainer, you might like to rethink your kitchen and outdoor spaces. Or if you look forward to having family and grandchildren to stay, a dedicated guest wing or granny flat could facilitate these needs. If you love reading, why not splash out on a library for all your books or perhaps you’d like to revamp the garage into an art studio or exercise space.
Also think about modifications that could help in your later years. Walking up and down stairs may become difficult, in which case a master suite downstairs could be a good idea. If you have a large garden, some easy-care plants and timed irrigation systems will make it easier to maintain. Install ramps, hand rails, non-slip carpet and sensor lighting to protect against trips and falls, while easy-access storage, a walk-in shower, wider doorways, ramps, smoother pathways and soft close doors will come in handy should you need the use of walking aides down the track.
3. Upgrade Your Downsize
If you’re an empty nester and that sprawling family home is becoming costly and difficult to maintain, moving to a smaller place could be the answer. In fact, 29 per cent of Australians aged 55 and over are considering the prospect, while 26 per cent have already done it, according to a report from the Australian Housing and Urban Research Institute (AHURI).
When you downsize, you essentially move to a smaller residence – apartment, unit, villa – to enjoy an easier or more cost-effective lifestyle. There’s less maintenance, and if you choose to live in an over-55s complex, you often have access to excellent facilities and social opportunities.
Depending on the home you move to, you may free up some capital that can then be put into super or towards funding your retirement dreams. However, the reverse can also be true if you move to a more expensive area, in which case you’ll need to finance this shortfall through refinance or from your savings.
4. Relocate For A Richer Retirement
Like downsizing, some couples choose to sell their family home so they can be closer to what’s important to them – be it family, transport or a more preferable lifestyle or climate.
Perhaps you’ve always dreamt of living in the country with a few hectares of land to grow crops or raise animals, or maybe you’d like to trade in your city lifestyle for an idyllic sea change. Multigenerational homes allow grandparents to move in with their adult children – albeit in separate living spaces – to assist with child care or for their own health needs.
While some retirees purchase a time share overseas where they can spend half the year – bliss! In this instance, you’re not necessarily downsizing but rather ‘right sizing’ for the lifestyle you’ve always wanted.
5. Reinvent Your Revenue Streams
If you plan to become a frequent traveller once retired, or you have empty rooms at home or a granny flat out the back, why not join the growing list of retirees who are listing their spare rooms on home-sharing platforms like Airbnb?
Whilst not suitable for everyone, considering potential income opportunities can bolster your retirement income. The benefits of sub-letting to travellers, for example, are many. For starters, the extra income can allow you to stay in your family home, covering the cost of repairs or maintenance, as well as funding your travels. You’ll also have regular company, which might appeal if you live alone, and be able to keep busy answering email enquiries, welcoming guests and sharing local travel tips.
Of course, there are costs to consider. Many local governments require you to register your Airbnb and obtain a permit and business license. You’ll need insurance and to report and pay tax on your earnings. In addition, there are cleaning and sanitising processes to follow, and possibly initial costs to furnish the space.
With all financial decisions, it’s important you seek independent advice from a financial professional and consider the pros and cons to ensure it’s the best option for you.
Brought to you by Boomer Home Loans. Boomer Home Loans offers a range of specialist home loan products for over 55s, helping you to live the life you deserve by unlocking the potential in your hard-earned wealth. Get in touch to learn about the full range of products on offer and their terms and conditions. Boomer Home Loans Pty Ltd Australian Credit Licence Number 532798