“Downsizing” concerning retirement generally means that you are selling a large family home and are moving into a smaller home for the “empty nest” stage of your life.
Your home is one of your largest assets and can be leveraged as part of your retirement plan. “Downsizing” concerning retirement generally means that you are selling a large family home and are moving into a smaller home for the “empty nest” stage of your life.
This means you’ll have less space, furniture, appliances, and stuff in general.
Downsizing can also be applied to your vehicles, as you may find you can get away with a single or smaller vehicle than you did during your working years. The decision to sell and relocate for retirement can be an emotional roller coaster and a significant financial event.
Here are a few tips to help you successfully downsize while living comfortably:
Before you think about selling your home and where you might want to move, establish your goals for this next phase of your life. Are you looking to save on mortgage payments and be closer to your grandchildren? This can help guide you in an otherwise overwhelming process.
Choosing when you want to downsize is important, but the answer depends on your retirement strategy and goals. Downsizing early during your retirement could help you cut back on expenses, such as utilities and taxes if your goals are financially driven.
If your goals are lifestyle driven, selling and moving to a smaller property would require less work and upkeep, freeing up your time for your hobbies or spending time with loved ones.
However, there are also advantages to waiting to downsize. Depending on the real estate market in your area, you might want to wait to sell your home and buy a new one at a better price. Delaying downsizing could also help preserve your wealth later in your retirement.
Downsizing your home generally means downsizing your stuff. Chances are, you’ve accumulated a lot of things while living in your family home.
Purging your belongings, especially those with sentimental value, can be an emotional and overwhelming thing to do, so do not feel pressured to clear out your whole house all at once. Instead, plan to do one room or section at a time and get help from friends and family!
You can donate your unwanted items, such as furniture, to charity or sell them for extra money to help cushion your relocation expenses.
