As they sell up the family home Australia’s 5.5 million baby boomers are the most active players in the property market and according to Downsizing with Ease founder Lorraine Cox, most of her clients downsize to retirement villages.

Talking with Chris Smith on Sydney radio station 2GB Ms Cox says that while moving to a retirement village “does seem expensive” it reduces the upkeep costs associated with the family home.

Research done by Villages.com.au indicates that a retirement village home is priced at around 80% of a similar property in the same neighbourhood.

With many downsizers becoming younger at 50 to 60 years of age, the concept of flexibility is becoming increasingly important and the concept of retirement villages attractive.

Apart from having extra cash after selling the family home, villages offer social benefits community amenities, and the freedom of “lock up and leave”.

It appears that one of the biggest concerns of the Baby Boomers regarding downsizing is its effect on the Aged Pension.

Department of Human Services General Manager Hank Jongen told Chris Smith that it depends on what you do with the surplus that can impact your pension. He added  that the property you live in is exempt from a pension asset test, but the extra money you get if you do sell could be considered an asset if you bank it.

Mr Jongen is urging anyone who’s thinking of making an important financial decision, like downsizing, to contact the Department of Human Services.