Are you asset rich but cash poor?

Do you want to boost your income?

You are not alone. According to the Australian Bureau of Statistics almost one-third of older Australians in low-income households were asset rich but cash poor. It was found that most of their wealth was tied up in liquid assets (most commonly their home).

Want to know how to become less asset rich and cash poor?

Below we have listed four ways that could help you to boost your income.

1. Take advantage of your property

Selling your current home and moving to a cheaper house may free up your money to help fund your retirement instead. Keep in mind that this scenario may affect your benefits if you’re older and receiving the age pension, as some of the proceeds from the sale of your house might be counted as assessable under the age pension assets test. This could lead to a drastic cut in your age pension so be wary before acting on this scenario.

2. Supplement your income

Getting a part time job could be another way to boost your income and cash flow. Remember that working when you have become eligible for an age pension may reduce your pension amount. Be sure to speak to a professional adviser to discuss if this scenario is realistic for you.

3. Rent out your property

If you have extra space in your home, you could consider renting it out. Or if you have another property like a holiday home, you may look into listing it as a short-term rental. This could impact the tax you pay when you sell your home so make sure to seek tax advice in relation to this strategy.

4. Revisit your investments

What have you invested in? This may be a good time to meet with a professional adviser to discuss and review your current investment portfolio.

Remember that you do not have to be trapped into a situation where you are asset rich and cash poor. There are multiple ways to boost your income but keep in mind that some involve taking risks. Make sure that you speak to a professional adviser to help you weigh up your options and make decisions based on your current financial situation. If you would like to speak to someone from the Addept Team today to discuss your current situation, please do not hesitate to contact us.