How baby boomers can renovate their retirement savings
86 % of Australian baby boomers do not have enough savings to retire. Ironically most have dedicated their lives to paying off the family home and have sizable amounts of equity they could be leveraged to boost their retirement savings.
Blogger: Bernadette Janson, The School of Renovating
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It’s high time that equity was put to work instead of being allowed to lie lying around like a lazy teenager. Here are some ways to go about it.
Supercharge Your Downsizing.
Downsizing is the buzzword at the moment. Given that the family home usually represents a sizable sum, it makes sense that if you are planning to sell, to make sure you return the most you can. Renovating is the most effective way to do that. A quick cosmetic renovation can add 10 to 15 % profit, which for a $500,000 home equates to an extra $50,000 -$75,000. The beauty is that profit made from the sale of the family home is usually tax-free.
Get A Piggy Bank
The mistake that some make is thinking they have to sell to access the equity. You can set up a line of credit secured against your existing home, as a piggy bank of sorts to fund renovation projects on other properties. When each project is sold you return the funds to your line of credit to go again. It is important to find a property- focused broker or bank that will work with you to achieve your goals. While a broker will tend to give a more personalized service, their commission structure tends to be limited to longer-term finance, for project-based finance a bank is usually a more suitable option.
Go On An Adventure
If you are the adventurous type and don’t mind living in a renovation project then you can renovate and sell the home you live in repeatedly; pocketing the profit as you go. The attractiveness of this strategy is limited to it being quite low risk and cost efficient, it’s not for everyone.
If it makes the difference between having enough money to retire well and not, I know which one I would choose.
Avoid The Tax Trap
You will need advice from your accountant particularly in regards to Capital Gains Tax to make sure you have based your strategy on facts, not assumptions. While the family home is generally exempt from Capital Gains Tax, renovating and selling repeatedly is treated differently tax- wise.
Knowledge Is Power
It is essential that you get educated on making profit from renovating, and know what adds value, what doesn’t and how to execute a profitable renovation. The biggest benefit to renovation education is learning to minimize risk. There are many aspects to understand about making a profit from renovating and you certainly don’t want to be gambling with the family home on “the school of trial-and-error. “
Knowledge is only power when it is matched with action, so if renovating your retirement savings is on your agenda then NOW is the time to act.
About Bernadette Janson
Bernadette Janson is a lover of renovating and the director Of The School of Renovating.
She knows that women get a raw deal with superannuation and the majority are facing a poorly funded retirement, particularly those on the wrong side of forty. The average superannuation payout for an Australian woman is $37,000 which is a fraction of what she makes on just one project. Her mission is to inspire , motivate and empower women to rise above the statistics and create for themselves a brighter financial future.
Bernadette’ passion began as a hobby twenty years ago while raising her four children when she discovered her flair for turning very ordinary houses into stunning family homes that are beautiful both aesthetically and functionally
Bernadette teaches renovating as a powerful and flexibility way to fast tracking your retirement savings while keeping risk to a minimum. To find out how renovating could fast track your retirement visit http://www.TheSchoolOfRenovating.com
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