Important Financial Facts to Consider
Many adults are including downsizing to a smaller home as part of an overall retirement strategy. Fannie Mae recently published a survey that showed 40% of homeowners 55+ plan to move either just before or just after retirement.
If you are in this group, you may be a bit overwhelmed by everything you need to think about. Leaving the home you raised your children in and the community you have been a part of can be tough. Here are 4 questions to ask yourself as you consider the financial pros and cons of make a downsize move:
Home Values – Here and There
- How do the home values in your potential new neighborhood compare with your current neighborhood? If you’re moving to a high-demand location like an oceanfront community, but you currently live in an average housing market, a smaller home may cost as much or more than your current home. That can be a good trade-off – just know the impact of this decision on your annual living expenses.
- Do you need some of the equity from your home to fund your retirement? If so, you’ll want to research potential homes carefully to find affordable options that allow you to stay mortgage-free and have a nest egg left over.
- Will you be moving closer or further away from family? Family members often play a huge part in the decision of where to move next. Younger retirees sometimes opt to try life in the tropics or a foreign country. Just be sure to factor in extra travel expenses to visit family and friends.
The Cost of Letting Go (or Not)
- How do you feel about reducing the amount of your belongings by at least one half? This is both a financial and an emotional question to consider. If you have enough items of value to sell, that could help with moving costs. If you struggle to let go of large collections, you may need to reconsider. The worst downsizing mistake most people make is what I call “moving the best and storing the rest”. Never use storage units as a delay to making decisions. It could cost you several thousand dollars, and your belongings will eventually deteriorate.
Who Can Help
Downsizing can be a catalyst to creating an easier and more affordable lifestyle if you take the time to consider your most important priorities. Find a real estate agent who specializes in working with downsizing homeowners to provide the data and resources as you move forward. Finally, visit with your Financial Planning Professional to consider how a downsizing move will impact other areas of your assets.
For more informative articles on easier downsizing for yourself or a loved one, visit our website at www.downsizemyhome.biz