In this guide
Selling a home can be a good way to free up some cash to top up your super and create additional retirement income. But what about the impact on your Age Pension entitlements?
The downsizer super contribution, available when you’re 55 or older, means you can invest up to $300,000 (or $600,000 for a couple) into super that doesn’t count towards the usual contribution caps. What’s more, it’s the only type of contribution that can be added to super beyond age 75 when the opportunity to make other personal contributions ends.
To use this measure, the property being sold must be fully or partially exempt from capital gains tax using the main residence exemption and you or your spouse must have owned it for 10 years or more.
It sounds attractive, but if you (or your partner) are receiving the Age Pension or another income support payment, converting your means-test-exempt home into an assessable investment could reduce your entitlements.
Whether your payments reduce and if the effect on your benefits is worthwhile to improve your overall income depends on your full personal situation. There’s a lot to consider, so we’ve put together some examples to demonstrate some of the possibilities.
Watch the video below or read on for more.
SuperGuide members have access to an extended version of this video that includes two additional real-world examples showing different outcomes, including when Age Pension payments decrease, disappear entirely, or increase when combined with lifetime income streams.
Learn more about becoming a member or start a free account.
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