A growing number of Baby Boomers are planning to downsize to boost their retirement funds, new research has found. The cost of a comfortable retirement has hit a record high, which may explain why some are trading in their family home to free up some extra cash.
Property developer Capital Corporation conducted a national survey of Aussie adults who own a home and planned to downsize in the next five years. It found 56 per cent of downsizers intended to move to a smaller home to free up money for their retirement and reduce housing costs.
Sydney self-funded retirees Corinne and Peter Collins are preparing to downsize from their five-bedroom house to a three-bedroom apartment on Sydney’s Upper North Shore. The couple told Yahoo Finance money wasn’t an issue for them, but the extra cash would give them an added boost to enjoy their golden years.
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“The extra capital we will get from selling this place and buying the unit will enable us to travel overseas or to go and see things in Australia,” Peter, 75, said.
The couple’s current home in Wahroonga also has three stories and 38 stairs, which Corinne, 72, said was a major factor in their decision to downsize.
The couple recently purchased their off-the-plan apartment in the same area at the Residences of Wahroonga Estate for just over $2 million and they are expecting to move in at the end of 2027. They are hoping to sell their current home for around $3 million.
“That gives you a bit of scope to work out that we’ll have a bit of cash to live on, along with our self-funded retirement pension,” Peter said.
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Capital Corporation’s research found 40 per cent of respondents in NSW and the ACT wanted to downsize to an apartment. A similar number of Baby Boomers hoped to relocate to a two or three-bedroom apartment.
One in four of those surveyed planned to scale down to a property within the same price bracket as their current home, with 16 per cent expecting to spend between $1 million and $2 million.
Capital Corporation director Jim Hunter said many of the apartment complex’s buyers were empty nesters, looking to “improve their quality of life” by downsizing from their family home.
The Association of Superannuation Funds of Australia found that a couple would need to budget $76,505 a year to fund a comfortable lifestyle, while singles would need $54,240 a year.