When retirement gets closer, you often think about a couple of things. How’s my health? Have I saved enough money? Should we move to a smaller home? Regarding retirement and life in general, these are all very important questions to answer. The first question is fairly straightforward, the second can be answered with a couple of calculations, but the third question is a little more difficult. In this article, I will discuss the factors you should consider when thinking about downsizing.
Why are you considering it?
When the question of whether or not you should downsize comes about, you first have to ask yourself, why are we asking the question? Is it truly the fact that you currently have more space that you need and would be better off moving to a smaller home?
Maybe you have debts that you want to pay. Moving from a big house to a smaller one could free up some cash to pay off debts that you have been slowly paying down. If you’ve been at your current home for a long time, you probably have a lot of equity that could be used to buy your next home in cash, and give some extra to pay for debts.
Do you have grandkids you want to be closer to? I feel like this is a common reason why people downsize and/or move. They have grandchildren that they would like to be closer to and spend more time with.
As your age progresses, your ability to move around and go up and downs stairs will dwindle. Moving to a one-story home is an easy way to avoid those stairs. Another solution for this problem that also keeps you in your home is modifications. You can put in an elevator or an automatic seat that brings you up your stairs. You also may consider building master suite on the first floor so there is no need to go upstairs anymore.
Where is the new home?
If you have been living in a single-family home in a rural area for decades and now decide to move into a condo in the city, you may be in for a rude awakening. Odds are, the amount you paid to live in your house in the country could be far less than what you will pay for a condo in the city.
What are your retirement plans?
Are you planning on traveling during retirement? Or do you plan on staying close in order to spend time with friends and family? If you plan on traveling, it might make some sense to move into a condo or apartment that takes less work to maintain. But if you plan on hanging close to home, it might make some sense to stay in your current home to accommodate those people.
The question on whether to downsize or not is an important one to answer. As I said, there are many factors that go into make the decision. Not only do you have to consider your finances, but you also have to consider geographic location, as well as the kind of life you want to live during retirement.