Meet Peter & Denise
Backstory
Peter and Denise had lived in the same four-bedroom home in Burleigh for twenty-six years. The kids were long gone, but the mortgage was too, and the house had quietly become worth more than anything else they owned. The problem was almost all their wealth was sitting in the walls around them. Their super was solid but not enough to fund the retirement they wanted, and Denise, in particular, couldn’t shake the fear of running out. Every big purchase came with a flinch, a mental tally of what it might cost them down the track.
It’s a familiar shape for a lot of the pre-retiree professionals and business owners we work with: plenty of net worth on paper, most of it locked up in one illiquid asset, and very little of it actually available to fund day-to-day life.
Planning Well
Referred by their accountant, Peter and Denise worked with Financial Adviser Anthony Mirandilla to turn a big chunk of the house into an income they could actually rely on.
→ Sold the family home and used the downsizer contribution rules to move $300,000 each, $600,000 combined, straight into super, outside the usual contribution caps.
→ Bought a low-maintenance townhouse ten minutes away, close enough to keep the same beach, the same coffee shop, the same friends.
→ Restructured their combined super into account-based pensions, turning a lump sum into a clear, regular income.
→ Built a year-by-year cash flow model so Denise could see, in black and white, exactly how long the money was projected to last, and what it could stretch to.
The downsizer contribution rules are one of the more generous, and more underused, tools available to eligible Australians aged 55 and over. They sit outside the standard concessional and non-concessional caps entirely, which matters for a couple like Peter and Denise who wanted to move a large sum into super in one go rather than trickle it in over several years.
Living Large
Peter and Denise now have a monthly income landing in their account that outpaces what Peter used to take home before he retired, without touching the family home they used to worry about maintaining. The flinch before big purchases is gone. They’ve started ticking off the travel list they kept putting off, including the Japan trip they talked about for a decade, and they’re looking at helping their daughter with a house deposit next year, on their terms, while they’re around to see her enjoy it.
In Their Words
“We went from feeling house-rich and cash-poor to actually living the life the house was supposed to give us. I sleep better knowing the number, not guessing at it.”
If Peter and Denise’s story sounds familiar, if most of your wealth is tied up in property and you’re not sure how to turn it into an income without giving up the lifestyle you like, this is exactly the kind of conversation we have regularly with clients through our retirement planning service (centaurfinancial.com.au/services/retirement-planning/). It’s also worth reading alongside our piece on the ideas in Die With Zero (centaurfinancial.com.au/retirement/die-with-zero-retirement-book-review/), since Denise’s fear of running out, and the plan that resolved it, is a real-world version of exactly the tension that book explores.
FAQs
What is a downsizer contribution?
A rule allowing eligible Australians aged 55 and over to contribute up to $300,000 each ($600,000 per couple) from the sale of their home into superannuation, outside the normal contribution caps.
Do I have to buy a smaller home to use the downsizer rules?
No. There’s no requirement to downsize to a cheaper property, but you do need to have owned the home for at least ten years and meet the other eligibility rules.
Does a downsizer contribution affect the Age Pension?
Money moved into an account-based pension is generally assessed under the assets and income tests, so it can affect pension entitlements. This is worth checking with an adviser before you act, particularly alongside the Centrelink and Age Pension changes taking effect this September.
Is there a time limit on making a downsizer contribution?
Yes, generally you need to make the contribution within 90 days of receiving the sale proceeds from your home, though extensions can sometimes be requested.
Can both members of a couple use the downsizer contribution even if only one owned the home?
Yes, both members of a couple can each contribute up to $300,000, even if only one of them is on the title of the property, provided the other eligibility conditions are met.
Suggested tags: #DownsizerContribution #RetirementIncome #Superannuation #CaseStudy #GoldCoastFinancialPlanners #RetirementPlanning
Plan well. Live large.
Centaur Financial Services is a Gold Coast financial planning practice helping professionals, retirees, business owners, and investors make confident wealth decisions. Based in Robina and serving clients across Australia, we’re proud to be one of Australia’s most awarded advice firms. We specialise in retirement planning and back it with institutional-grade investment capability.
This article is general information only. It does not take into account your personal objectives, financial situation or needs. Centaur Financial Services Pty Ltd is a Corporate Authorised Representative (CAR No. 342372) of Abundant Wealth Partners Pty Ltd, ABN 35 680 570 487, AFSL 564749. Please obtain personal advice before acting on any of this content.
