Spending money on your kids and grandkids is the best investment you can make |
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Thought about downsizing?
That's when you sell the house you've lived in for donkey's years and buy something smaller and, with any luck, cheaper. That means you can pocket a tidy margin.
Not everyone wants to buy something cheaper. I've known people who've said to me, "we're right-sizing not down-sizing". In our case, we've gone for something three bedrooms. One for us, one for the grandkids and a room in which to work. I'm a noisy interviewer and so it will be nice for the rest of my family to have a break from me talking to people endlessly on the phone.
But what are you doing with your "tidy margin"? Sure, the sensible thing to do is to use the government's downsizer contribution so you can top up your superannuation. A great idea - and one large industry fund HESTA says it has hit record levels of those contributions increasing by more than eight per cent from 2024 figures and up 45 per cent from 2023 levels.
It's good to top up your super as a way to make your retirement as secure as it can be.
But the next best thing you can do? Give money to your kids. Give enough money to your kids to get them into the housing market wherever they are. Yes, of course, I'd love an actual government policy which made the system fairer for everyone and made it possible for our kids to get into the housing market: reforming negative gearing, reducing the capital gains tax discount, maybe even a touch of land tax here and there. But we can't wait for governments forever.
I asked Bob Breunig, director of the Tax and Transfer Policy Institute at the Australian National University, whether he thought it was sensible. Why did I ring him? I figured he would have a responsible approach - as opposed to me trying to rescue everyone.
And guess what? He and his wife have given their two children enough........