Retirement is an opportunity to assess where you live and how you want to live. You may start to think about whether you want to stay where you are, downsize or move to a retirement home.
Your children may have moved out, and the family home now seems too big. Perhaps you no longer want to be responsible for running a house.
Or your health is not as good as it used to be, and you need a bit more help. You might see an opportunity to reduce rent or loan payments.
Questions to help you decide where to live
Whether you’ve stopped work or planning for retirement, you could consider your living arrangements by asking yourself some key questions, including:
- What is my present financial situation? (For example, do I own or rent, do I have debt, am I financially responsible for someone else?)
- How is my health now, and should I plan for future health care needs?
- Do I want to stay near family and friends?
- How much room do I need?
- What kind of lifestyle do I want?
If you own your home
Staying in your home
Staying in your own home, at least in the early years of retirement, has plenty going for it. You know your community and it might mean you stay close to family and friends. You are likely to have an emotional attachment to your home and the geography. Familiarity can be very comforting.
If this is your choice, things to consider include:
- Do you, or will you in the future, need renovations or upgrades to bathrooms, kitchens, or other areas of the house to make living easier? It might be replacing steps with ramps or installing more rails in the bathroom to help with your independent living.
- Do you need help with daily chores such as cleaning and shopping? The government provides services such as the Commonwealth Home Support Programme.
- Are you considering refinancing your home, or using your home equity, to help fund your retirement?
Some of these questions are complex and your decisions could affect your partner, family and anyone you live with. Consider getting financial advice before you make big financial decisions.
Downsizing in retirement
There are many reasons you may consider downsizing, including being closer to health services, or if your home needs costly improvements.
Downsizing is also a way to free up cash for your retirement. But it does come with costs and may impact your Age Pension and government benefits.
Read more about downsizing in retirement.
Maureen and Gary downsize their home
With their five kids out of home, Maureen and Gary were starting to think four bedrooms and a big backyard was more than they wanted to maintain. They worked together to figure out their options. Using online tools and checking in with their super fund and bank, they looked at what they owned and what they might need when they stopped working. After weeks of discussion, they decided to sell their home and buy a smaller apartment with no stairs. Even after transaction costs, they felt they would be in a stronger position and better off financially and emotionally.
If you rent your home
Rent is a big, ongoing expense for many retirees. If you rent your home, think about whether you can afford the rent when you stop working. You may have less income in the future.
If the private rental market is too expensive, there are lower rent options. Church and community organisations sometimes offer cheaper rooms or units for retirees who do not own their home.
If you receive a Centrelink payment, you might be eligible for Rent Assistance.
For advice about staying in your rented home, contact your state or territory tenants union:
- Australia Capital Territory — Tenants’ Advice Service ACT
- New South Wales — Tenants NSW
- Northern Territory — Darwin Community Legal Service Tenants' Advice Service
- Queensland — Tenants Queensland
- South Australia — RentRight SA
- Tasmania — Tenants’ Union of Tasmania
- Victoria — Tenants Victoria
- Western Australia — Tenancy WA
If you need help with housing or other support, see get help in retirement.
If you need to move into residential care
Help at home and aged care options
If you need help in your home, or can no longer live independently, the Australian Government provides a range of subsidised aged care services. There are also many privately run retirement homes and villages, but you pay the full amount yourself.
Before you sign up, check all the fees and charges, and how they may increase over time.
For more information about your options, see aged care.
If you’re buying a unit in a retirement village, get advice from a solicitor. Make sure they have experience with retirement village contracts and the Retirement Village Code of Practice in the state or territory.
Key takeaways
- If you own your home, consider your wants with your needs – a different lifestyle, close to family, health needs, to free up your capital.
- If you rent, see if you’re eligible for rent assistance and include rent in your budget.
- Create a budget for ongoing household expenses, matching it to your income sources. Remember to include inflation (price rises) of products.
- If you’re looking to downsize, consider the costs involved to make sure you will be financially better off.