Viewing posts from: February 2017

Downsizing

All / 24.02.20170 comments

By the time you retire, you have probably collected a considerable amount of home equity and downsizing can be a way to tap into that valuable cash.

Downsize your lifestyle – not your life

When your kids left home you probably had big plans for those unoccupied bedrooms – like the art studio you’ve always wanted, a sewing room or a play room for the grandkids.

But it’s a fair bet those rooms have barely changed and now you may be wondering if you really need all the extra space.

Downsizing can be a way to harness the home equity you have built up. But it’s a big decision and you need to be sure it is the right choice that helps you scale back your life without scaling back your lifestyle.

Let’s look at some factors to consider.

1. Where would you like to move to?

When you’re not in the workforce, your choice of location is no longer dictated by proximity to work. You’re free to explore a change of scenery or even relocate overseas.

This opens exciting possibilities, although you may want to remain close to family or friends. This certainly makes a long distance relocation something to think through carefully. If you’re heading off to a new location, investigate whether the area has clubs and organisations to help you make new friends and become part of the community

2. What sort of property are you looking for?

Along with the location, plans to downsize should cover the type of property that is right for your needs – both now and in the future.

Some of the factors you may want to look at are the ease of maintenance of the property, how many stairs it features and whether doorways are wide enough to accommodate aids such as a walking frame. Single level living is often a plus for seniors.

3. Does it stack up financially?

On paper at least, downsizing can seem like a great way to free up extra cash. But you will need to pay for a new home and this brings a range of buying and selling costs which can eat into the sale proceeds of your current home.

There are ongoing costs to consider too. Moving from a house into an apartment can mean a lower maintenance style of living. Be sure to look into strata levies though. The more facilities an apartment complex offers, the higher the levies you are likely to face.

4. Have you considered your emotional needs?

There’s a lot of family history tied up in our homes and you shouldn’t discount the emotional attachment to your place. Think through the decision to move very carefully and discuss it with your family. The last thing you need is to make a decision you’ll regret.

Investing the proceeds from the sale of your property

Give some thought to how you will use the funds remaining from the sale of your old place once you have purchased a new home.

One possible strategy is to use the money to make a non-concessional (after tax) contribution to your super fund.

The non-concessional contributions cap for the 2016/2017 year is $180,000, however this will reduce to $100,000 per annum from 1 July 2017. The ability to make non-concessional contributions up to 3 times the cap by bringing forward the cap for the following 2 years in certain circumstances will be retained but will be based on the lower cap.

If you’re aged 65 or over, you must satisfy a work test to be able to make a non-concessional super contribution and you cannot take advantage of the bring-forward rules.

In addition, from 1 July 2017 non-concessional contributions can only be made by those who have total superannuation balances of less than $1.6 million.

While investing the proceeds from the sale of your property into super is one potential strategy for you to consider, we can further discuss other strategies that are tailored towards your situation and goals.

For more information or to speak to one of our Financial Advisers please contact TNR Wealth Management on 02 6621 8544.

Disclaimer

Past performance is not a reliable indicator of future performance. The information and any advice in this publication does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. This article may contain material provided directly by third parties and is given in good faith and has been derived from sources believed to be reliable but has not been independently verified. It is important that your personal circumstances are taken into account before making any financial decision and we recommend you seek detailed and specific advice from a suitably qualified adviser before acting on any information or advice in this publication. Any taxation position described in this publication is general and should only be used as a guide. It does not constitute tax advice and is based on current laws and our interpretation. You should consult a registered tax agent for specific tax advice on your circumstances.

 

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Economic and market update – Feburary 2017

All / 16.02.20170 comments

How did the markets perform in January? Click Here to learn more.

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Superannuation Education Sessions

All / 01.02.20170 comments

 

The May Budget introduced significant changes to superannuation that will affect all members and trustees. After months of speculation, the reforms have passed through parliament with most changes effective from 1 July 2017. We now have just a few months to make arrangements for the new rules.

To assist with making these crucial decisions, TNR Accountants and TNR Wealth Management have been running one hour education sessions during January and will be running more throughout February.

To date there have been over 100 people register for these sessions with another four scheduled in February.

The dates for the February sessions are as follows:

Friday 3rd 12pm – 1:15pm

Monday 6th 5:30pm  – 6:45pm

Wednesday 8th 10am – 11:15am

Friday 10th 12pm – 1:15pm

If you would like to attend one of the above sessions please contact the office on (02) 6621 8544 or click here to book

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