Retirement should be the part of life where you finally get to slow down – not decode the finer points of deeming rates or wonder whether giving the house to your daughter will end in a family cold war. Yet for many Australians over 60, the biggest financial questions all circle back to three areas: the home, the pension, and the fear of causing chaos for the kids. So let’s tackle three of the most common (and most relatable) questions I hear every week.
1. “If I downsize, how do I stop Centrelink from punishing me for freeing up space?”
Downsizing can be a wonderful way to simplify life, reduce maintenance, and even boost super via a downsizer contribution. But Centrelink sees the proceeds of your home sale differently than you do. While your family home is exempt from the assets test, any leftover money from selling it may not be. To avoid surprises, speak with an adviser before you sign anything – we can model how the sale price, purchase price, and timing affect your Age Pension.
The goal is to help you move somewhere smaller without shrinking your income along the way.
2. “Is putting my home in the kids’ names smart or the beginning of a slow horror movie?”
I’ll be blunt: it’s the second one. Gifting your home can trigger capital gains tax, affect your pension, and leave you legally homeless if something goes wrong – divorce, bankruptcy, even a falling-out over Christmas lunch. More importantly, it does not protect your home from aged care fees.
This myth has caused more unintended disasters than I can count. Keep your home in your name and explore safer strategies instead.
3. “Aged care! Reverse mortgages! Pension tests! How do I plan without crying?”
You’re not alone – aged care is one of the most emotionally charged parts of retirement planning. The key is to break it down: understand the potential fees, consider how your home will be assessed, and decide whether you’d like to use super, savings, or – in some cases – a reverse mortgage to cover future costs.
A reverse mortgage doesn’t mean selling your home, but it does mean slowly using up some of its value. It can be a helpful tool when used wisely and with full awareness of how interest compounds over time.
Retirement isn’t just about protecting your money – it’s about protecting your peace of mind. With the right strategy, you can do both.
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