From the grey nomad trail to a deluxe sea change, there are plenty of lifestyle options available to cashed-up baby boomers anticipating retirement, writes Harvey Grennan.

This is the year that the first baby boomers turn 65, and what a lot of retirement options confront them. Remember, this is the generation that has benefitted most from rising property prices; one in four Australians approaching retirement age holds an average of more than $1 million in assets, according to the National Centre for Social and Economic Modelling.

The choice for asset-rich retirees is wide indeed, although many will prefer to keep rattling around in a large family home. The obvious alternative is a smaller, easy-to-maintain apartment, townhouse or villa. The next option may be a sea change to the coast or tree change to the bush. Or a combination: say, a unit in the city and a weekender by the sea. For the adventurous, there's the 'grey nomad' trail around Australia in a motorhome or a house in Provence or Tuscany.

There is a multi-billion dollar industry in developments designed for the over-55s, from manufactured home villages to five-star 'resorts' with pools, cinemas, restaurants, beauty salons and everything a boomer might desire.

The ideal choice depends on several considerations. First, do you wish to retain and grow the value of your assets to leave to your heirs, or join the SKI (Spend the Kids' Inheritance) club? For those without children, it's a choice between a good time or a large bequest to charity.

Once you've established a sufficient income stream to live comfortably, it makes sense to buy the most expensive property you can afford, as the capital appreciation will be tax-free. But beware: some states levy annual taxes on an expensive home even if it's your principal residence. In NSW, for example, land tax is payable on a principal residence with a land value of $2,366,000 or more.

Possibly the worst option is a manufactured home village where you don't own the land but pay 'rent' on the space you occupy. Your chances of any capital gains are, well, chancy.

If you opt for a place in the city and one in the country or coast, you'll pay two sets of rates, electricity charges and so on. Also, any capital gain on a second property will be taxable.

A popular choice for downsizers is to put the excess money into investment property, if you don't mind the hassle of maintaining another property and dealing with agents and tenants.

Another option is to renovate the family home to suit your new circumstances. This may involve dividing the home and sharing it with family or tenants.

Downsizers' checklist

How close will you be to a retail centre, golf course/bowling club, doctor/hospital, cinema, community facilities and cafes?

Is the property near family and friends?

How good is the local public transport?

What activities and facilities are provided?

Is the accommodation on a single level, and is it a level walk to the local facilities?

The new aged

Developments for the over-55s are no longer limited to modest villas with a hostel and nursing home attached. These days they can be five-star apartments in a Georgian mansion, luxury high-rise towers with ocean views or designer bungalows in a palm-fringed resort. Prime examples include the Waterbrook sites in Sydney, Seachange Village at Arundel on the Gold Coast and Menzies Malvern in Melbourne.