TOO MUCH HOME AND NOT ENOUGH SUPER?
Saying Australians love property may just be an understatement! For many of us, the family home is the cornerstone of our financial wealth. That’s right… we focus so much of our energy and income on our homes we often end up with not enough money for retirement. Asset rich and cash poor comes to mind.
The good news is that there are practical strategies available to help rebalance your financial world, particularly if you’re willing to reconsider how your wealth is structured as you approach and enter retirement.
You may consider downsizing your home, unlocking wealth that can be turned into retirement income. One of the most effective tools available for homeowners to do this is via the downsizer contribution. If you’re aged 55 or over and have owned your home for at least 10 years, you may be eligible to contribute up to $300,000 from the sale proceeds into your superannuation (or $600,000 for couples).
If you were to sell your home, use the downsizer contribution and find you still have sales proceeds left over for retirement, you can also consider non-concessional contributions to super. In a few months’ time (1st July 2026) the non-concessional contribution cap increases to $130,000 pa, or by using the Bring Forward Rule, you could contribute up to $390,000 in one go (in addition to the downsizer contribution).
So, for some lucky people with too much home and not enough super, the real benefit comes from using both strategies together. By combining a downsizer contribution with non-concessional contributions, it’s possible to move a large portion of wealth from your home into super, unlocking wealth that can help fund full-time living.
The icing on the cake may just be the fact that once you hit age 60 and retire, you’re able to hold this wealth via an Account Based Pension with nil tax applied to earnings, growth or income payments.
Enter the fun police… whilst these strategies can potentially be very beneficial, there is a lot to consider before you go selling your home and placing all funds into super. We are talking about a home, a lifestyle, eligibility rules regarding super, buy and sell costs when selling your home, Government pension considerations and much more. Needless to say, before you go making a big decision like selling your home to help fund your retirement, you need to get educated and seek professional, independent financial advice.
What we want you to take away from this Money in Minutes is that having too much home and not enough super is a common solvable problem. It often involves an approach to ensure you get the right balance between having a nice home and having adequate financial wealth (the fuel) to live your desired lifestyle.
Cheers,
Dan and Dave
