Boosting super through downsizing
Goals
Margaret wants to pay off the remaining mortgage, reduce maintenance costs, maintain eligibility for the Age Pension and improve her income in retirement.
Financial Impact
| House sale proceeds in savings account | House sale proceeds in super contribution | |
|---|---|---|
| Super balance | $450,000 | $650,000 |
| House proceeds | $200,000 | $0 |
| Income in retirement from super (age pension + income) | $57,500 per annum | $60,400 per annum |
| Mortgage | $0 | $0 |
Key benefits
- Assumes the individual draws down their entire balance between age 67 and 95.
- Assumes Margaret is married.
- Assumes Margaret is invested in the Conservative Balanced investment option.
- Assumes Margaret has $50,000 of personal assets outside of super.
- Retirement incomes are rounded to the nearest $100.
- Numbers are presented in today's dollars, deflated using Average Weekly Ordinary Time Earnings (AWOTE) at 3.7% p.a.
- Based on SG of 12%.
- Based on current legislated tax rates as at 1 July 2025 and incorporating future legislated tax changes up to financial year 2027/28.
- Fixed fee is assumed to be $52 p.a., increasing in line with assumed wage inflation of 3.7% p.a.
- Asset based administration fee is assumed to be 0.17% in pension.
- Investment returns are based on the Aware Super MySuper Life Cycle option, assumed to be CPI + 4% until age 55, reducing from CPI + 4% to CPI + 2.75% between the ages 55-65 (inclusive) and CPI + 2.75% from age 65 onwards.
- Pension returns are based on the Aware Super Conservative Balanced option assumed to be CPI + 3.45%.
- Investment returns are assumed to be net of tax.
- Savings returns are assumed to be 3.15%.
- CPI is assumed to be 2.5% p.a.
- This example is for illustrative purposes only and is not intended to provide a guarantee on outcome. It is a broad illustration of the steps a member could take, but the actions appropriate for an individual will vary depending on their personal circumstances. The case study is based on current regulatory requirements and laws, including tax rates, which may be subject to change. Investment return assumptions are for illustrative purposes only and for simplicity assume an average rate of return each year throughout the investment period. Actual returns year on year may vary materially and can be negative as well. If investment returns/inflation are higher/lower, final balances will differ. Consider if this is right for you and read our Product Disclosure Statement (PDS) and Target Market Determination (TMD) before making a decision about Aware.
Where to next?
1 Downsizer contributions can’t exceed the total proceeds from the home sale. For example, if a couple sell their home for $550,000, that’s all they can contribute as a downsizer contribution. They can’t add additional funds to reach the $600,000cap.
* Before contributing, consider the relevant superannuation thresholds including the current annual limit for all before-tax contributions and after-tax contributions. Exceeding any of these thresholds, may reduce any tax benefits you could receive. Visit aware.com.au/grow.
[AD3] Fees are payable for comprehensive advice, including about your financial situation outside super. If you decide to move forward with comprehensive financial planning, we’ll explain our fees before you begin.
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