Downsizing your life: the financial benefits of an empty nest

As your children grow up, they’ll naturally seek to establish their independence more and more. Eventually, they’ll move out to live their own lives. This life event may put you on a roller coaster of emotions where you end up feeling abandoned, lonely or even heartbroken.

But with your children taking care of themselves, your time now belongs solely to you. With this freedom, you can do whatever you like, whenever you like, including downsizing your residence to free yourself from some financial obligations.

While the thought of selling your home and finding a new one to live in may be overwhelming at first, downsizing may be the right move for a more comfortable retirement.

The financial upside of downsizing your life

When you’ve followed through on downsizing the place you live, and overcome its initial challenges, there’s a high likelihood you’ll feel less burdened.

Having downsized, your mortgage repayments, maintenance bills, utility costs and cleaning costs will reduce. You’ll have more time too, if you’re used to cleaning and looking after a much larger home.

Overall, you’ll have more money and time to spend on yourself.

You’ll be able to live the life you’ve dreamt of for so long. Do the things you’ve always wanted, like taking lengthy vacations to exotic bucket-list locations. You’ll be free to take up hobbies you’ve put on hold for decades. Or even pay off debts that have lingered for longer than you would have liked.

If you and your partner both decide to make downsizer contributions, you’ll both be placing up to $600,000 into a highly tax-effective environment. You’ll have more interest compounding over time and more money to live your best life after you stop working.

Did you know with Super SA, you can salary sacrifice up to 100% of your salary?

Whether you’re downsizing or not, you can still make the most of an unlimited before-tax contribution over a period of time.

Is your nest empty, or about to empty out?

If you’re currently a Super SA member aged 65 or over you can make a downsizer contribution of up to $300,000 into your Triple S, Super SA Select account, or Flexible Rollover Product (FRP).

Under new measures proposed in the 2021-22 Budget (released Tuesday 11 May, 2021), the age threshold may come down to 60 but these have not yet been passed.

In any case, we highly recommend getting in touch with Member Services or a financial adviser before selling your home and making the big leap. Everyone’s financial situation is a little different with some being more complex than others so it’s best to get professional advice.

If you want help or need to speak with someone about your superannuation, call 1300 369 315 or fill in our contact form.