01 Jan 2025
If you are planning on Retiring Soon, Should you Downsize Your Home?
After the kids have left, many adults end up owning a valuable empty nest that is too big for their living purposes. For some adult homeowners, choosing less space to live in often has to do with the desire to live a simpler, low maintenance lifestyle.
So does it make sense to downsize in your older age? Consider these points:
- Even if you plan to pay off your mortgage before you retire making you mortgage free, you will still be burdened with property taxes, utilities, insurance and maintenance that will be higher on a larger home.
- One of the often-overlooked side of retirement planning is expense reduction. With a larger home, your expenses will be the same and as high as if you were working. By cutting your living expenses, you are in effect creating retirement income. Remember, the less money that you need to live on, the less retirement savings you need to have.
- Many people will have paid off their home by the time they retire. By selling their home and moving into a smaller one, the money that is left over, can be an integral part of their retirement portfolio, giving them a more comfortable lifestyle.
- Its common for people to travel once they retire. If you plan to travel and be away from your home for a good part of the year, you’ll have even less need for a large home.
- Once you retire, how much time do you want to spend on the maintenance of your home – lawn cutting, snow shoveling, repairs etc.? In a condo or apartment, you will be spared most of these responsibilities. Also there may be a time when you physically cannot do many of the required tasks and will end up hiring someone to do this for you.