For the majority of families, their home and superannuation will be the two most valuable investments they will own in their lifetime. Here we discuss how the family home might be used to potentially assist in wealth and lifestyle creation.

For those that have purchased their family home, a great deal of value is often held within its walls. This value comes in many forms including physical, emotional, financial and more. Specific wealth strategies can be created around anything of financial value and, once in place should be fine-tuned throughout various life stages. So what should property owners consider when it comes to utilising, most effectively, the home in which they live?

For those of you who are already enjoying your retirement

Your home now, most likely, is completely mortgage-free. But requests may come from your children, to act as a guarantor over their mortgage. Try to remove any emotion from such a decision and consider it, as you would any other investment, rationally. As with any agreement it brings with it an amount of risk, perhaps this fits your risk profile, perhaps it does not.
If you have not yet put an estate plan in place, it has now become a necessity. The wealth you have created throughout your working life can be looked after and distributed according to your wishes if wills and enduring powers of attorney are in place. This is important for everybody at this life stage, but even more important for those that own all or part of a business, or have children from another marriage. Clarity around your final wishes is vital.
Downsizing is a popular decision during this life stage, and for good reason. There is an emotional side to moving out of the family home, but once that original hurdle has been negotiated, most retirees feel a sense of release and relief. They are no longer responsible for the physical and financial demands of the upkeep of a large home. And a move can bring them closer to friends and family, or to an area offering better infrastructure for the elderly. Perhaps most important at this stage is the bearing of the family home on matters such as aged care and Age Pension, which can be substantial. The issues around this topic are broad and complex. Be aware that expert advice is highly recommended in order to assist with any major decisions regarding your family home.
Key takeaways:

  • Consider guarantor requests very carefully
  • Review your estate plan
  • Consider lifestyle benefits of downsizing
  • Speak with an expert about the family home in relation to benefits etc

Source: Count Financial
Disclaimer: This article has been prepared by Count Financial Limited ABN 19 001 974 625, AFSL 227232, (Count) a wholly-owned, non-guaranteed subsidiary of Commonwealth Bank of Australia ABN 48 123 123 124.
Information in this article is based on current regulatory requirements and laws, which may be subject to change. While care has been taken in the preparation of this document, no liability is accepted by Count, its related entities, agents and employees for any loss arising from reliance on this document.
This document contains general advice. It does not take account of your individual objectives, financial situation or needs. You should consider talking to a financial adviser before making a financial decision.