Our clients, a retired couple in their mid to late 60s, had spent decades in their family home. While the property held sentimental value, it no longer suited their lifestyle or future needs and most of their wealth was tied up in this residence. They were ready to start the downsizing process, but not downgrade, to a more manageable and appropriate home.
Their downsizing goals were clear:
- Streamline their financial affairs for simplicity and ease.
- Transition into a new home that better suited their future.
- Maximise the use of surplus funds from the sale.
- Create a tax-efficient income stream.
- Gain peace of mind through financial projections.
Challenges
- The journey wasn’t without its hurdles. Key challenges included:
- Untangling a complex web of bank accounts and individually held shares accumulated over time.
- Aligning the sale and purchase contracts to avoid the need for bridging finance.
- Navigating superannuation contribution caps.
- Gathering and organising data on existing financial assets.
- Managing the physical and emotional task of decluttering and moving.
Downsizing Planning Strategy
We approached the situation with a comprehensive, hands-on strategy:
Property Transition
We coordinated with the conveyancer and real estate agent to ensure a same-day settlement for both sale and purchase—eliminating the need for bridging finance.
Superannuation Contributions
After reviewing ATO records and property title deeds, we confirmed eligibility for the downsizer contribution. Both clients qualified to contribute $300,000 each into Super. We also utilised the bring-forward provisions for non-concessional contributions, allowing an additional $360,000 each. In total, we successfully moved $1,320,000 into Super.
Budgeting and Investment Strategy
- We segmented their future expenses into:
- Day-to-day living costs
- Larger, periodic expenses such as car replacement, furniture, renovations, and holidays
- This informed a tailored investment strategy aligned with their risk tolerance and lifestyle goals.
Streamlining Finances
- We reviewed and consolidated bank accounts to optimise interest earnings.
- Transitioned individually held shares into a consolidated platform using in-specie transfer rules—avoiding a capital gains tax event and simplifying tax reporting.
- Assessed eligibility for Centrelink benefits.
Downsizing Results
Short-Term Wins
We successfully invested $1.32 million into Super, moving it into income stream phase to eliminate tax on earnings and pension payments. Then, we created a retirement gap analysis to test how long their money would last against life expectancy and spending needs. Lastly, we also helped them move into a more suitable home and simplified their financial affairs, making their investments easier to manage.
Long-Term Outlook
Our clients retirement plan is now both resilient and flexible which gives them confidence in the years ahead. And their income stream is now tax-efficient and built to last. Best of all, their financial affairs are now tidy, consolidated, and easy to manage—no more chasing paperwork across multiple accounts.
Lessons Learned
This case highlights the value of project management in financial planning. From property transactions to retirement strategy, we guided our clients through each step—ensuring they didn’t miss opportunities and could enjoy peace of mind.
Conclusion
If you’re considering selling your home and downsizing—whether into a smaller property, a retirement village, or aged care—we specialise in making this transition smooth and financially rewarding.
It can be a juggle, especially if you’re receiving Centrelink payments, and the process can feel overwhelming. We’re here to help you navigate it all, ensuring you don’t miss out on valuable financial opportunities. Simply get in touch and let’s get to work.
IMPORTANT INFORMATION: Goldsworthy Private Wealth Pty Ltd ABN 24 657 947 101 Authorised Representative and Credit Representative of AMP Financial Planning Pty Limited, Australian Financial Services Licensee and Australian Credit Licensee., based on our understanding of the relevant legislation at the time of writing. While every care has been taken, Goldsworthy Private Wealth Pty Ltd makes no representations as to the accuracy or completeness of the contents. The information is of a general nature only and has been prepared without consideration of your individual objectives, financial situation or needs. Before making any decisions, you should consider the appropriateness for your personal investment objectives, financial situation or individual needs. We recommend you see a financial adviser, registered tax agent or legal adviser before making any decisions based on this information.
