Wealth Connexion provides insight on whether selling your family home is a must to cover aged care fees.
Preparing for the next chapter of retirement can be daunting and stressful for most Australians, especially when you’re unsure of how to support yourself or your loved ones when moving into an aged care home or living arrangement. Wealth Connexion’s aged care financial advisors break down whether it’s necessary to sell your home while showing you some other options that may be available to you.
What are the benefits of selling your home?
The biggest pro of selling your home is to receive a large sum of money to pay towards any aged care fees or outstanding debts you may have. This will reduce stress and panic when planning to move into aged care. While this does sound ideal, it may not be necessary. Aged care homes don’t typically enforce a lump sum, meaning you’re able to pay your fees like you would if you were renting. If you have any leftover money from selling your property, after paying for your aged care living arrangements, you will be able to invest that money elsewhere to support you or your loved ones in the future.
What are the disadvantages of selling your home?
It may not be necessary to sell your home, in order to move into aged care. While it may make things easier, when paying for fees and managing mortgage repayments, you may find it’s more beneficial to hold onto your home and rent it out for a steady income. This gives you more opportunities to do what you like with your home if you’d rather not sell. By renting out your property, you may have more financial support to pay for any tricky financial issues or hiccups that life may throw at you. If you would simply rather sell your home to get that large sum of money, it’s important to consider that any remaining money you have from your property will be included in the aged care means test. This may mean that you could potentially lose some financial support, due to the amount of money you will have.
So, what should I do?
Like any decision, it’s important to weigh the positives and the negatives as we’ve outlined above. If you’re still stuck between selling or keeping your home, ensure you’ve done all the necessary research you can. This includes completing the Australian Government’s means test, which will allow you to better understand the type of support you’ll receive from the government if you do or don’t sell your home. This will enable you to have a better understanding of which option to choose from. If you’re still unsure, confused or overwhelmed, don’t be afraid to contact the Brisbane-based Wealth Connexion’s team on 07 3891 5666 or email us at admin@wealthconnexion.com.au. Our aged care financial advisors would love to assist you and give you a more in-depth understanding of aged care living.
