When nearing retirement age, many homeowners consider the option of downsizing, which is just moving to a smaller home. The primary goal behind downsizing is to lower housing and living costs and make home maintenance much more manageable as retirees age.
However, downsizing involves buying a home after retirement, selling off the previous home, and–in most cases–getting rid of a lot of stuff. There is also the emotional process of leaving a home that one stayed in for decades and letting go of things that hold sentimental value. Understandably, this process can be difficult for many homeowners, especially when they choose to relocate to a different town or city altogether.
With that in mind, we’ve come up with a short guide that can help you decide if downsizing is right for you–and how to do it if you choose that it is the best next step after retirement.
Benefits of downsizing
There can be many benefits to downsizing, even though it is essentially moving to a smaller home. Here are some of the best ones:
Lower housing and living costs. Moving to a smaller home can lower your mortgage payments (if you are still paying it off). A smaller house also requires fewer costs for maintenance and utilities, which can help make budgeting easier. If you make a profit off of selling your previous home, you can also use the difference to pay for other debts, increase your cash reserves, or invest in other forms of retirement income.
Less maintenance. Maintaining a home grows more and more difficult as one ages. A smaller home means less space you have to clean, fewer things you have to maintain, and fewer steps to take to get to and fro.
Opportunity to declutter. Moving to a smaller home often comes with the opportunity to get rid of excess clutter. When downsizing, you have to prioritize which stuff to bring and which possessions to leave behind, giving you a clean slate in your new home.
Lifestyle changes. Downsizing also allows you to pick a new location where you can thoroughly enjoy your desired retirement lifestyle. For instance, if you’ve always wanted to maintain a garden but could not do so while in the city, you can downsize to a new home in the suburbs where nature tends to grow more freely.
Moreover, downsizing is also a great option to improve your health as you age. You can pick a location with less pollution, noise, and traffic, so you can enjoy your retirement without worrying too much about environmental hazards.
Should you downsize?
Moving is a significant change in anyone’s life, especially if you’ve been living in your current home for decades already. Therefore, one has to be physically, mentally, and emotionally ready before relocating. And with that, here are several signs that downsizing may be the right choice for you:
You don’t mind leaving your home behind. Moving out of your current home where your kids grew up is a difficult process. But if the pros of downsizing beat the emotional tether you have to your house, you are just about ready to start your retirement life elsewhere.
You have the time. When you are already retired, you likely have the time to take care of all the details that moving entails. But if you are just about to retire and are still in the workforce, consider the amount of time it takes to find a new home, organize the moving process, and take care of all the paperwork before deciding to move.
Your current house is holding you back. The maintenance of your current home could be taking up all of your free time. Or perhaps you live too far away from your family and friends. If
you feel that your current house is holding you back from what you want to do in life, take it as a sign to relocate.
Obtain Income in Retirement Without Selling.
A reverse mortgage is an extremely useful financial product that can help homeowners increase their cash flow and live the rest of their lives in comfort. The biggest benefit of a reverse mortgage is that it provides retirees with a substantial amount of money while allowing them to continue living in their home–so long as they meet ongoing requirements.
A reverse mortgage like South River Mortgage’s HomeForLife program is an excellent option instead of downsizing–and if you don’t want the hassle of having to move.