Moving into Retirement – Should You Downsize Your Home?
The transition into retirement is one of the most critical times of your life. Moving from the daily grind and the daily commute to a life of leisure may seem like a dream come true, but there are many important things to consider before you make the leap.
If you are getting ready to make the transition into retirement, you may have already looked at your financial decision. Hopefully that financial assessment revealed that you are on track for a financially comfortable retirement, but money is not the only thing to think about.
You will also want to think about how you will fill the hours that once were spent at the office. You probably already have hobbies and outside interests, and you may be picturing a retirement spent pursuing those activities. Even so, you can only golf so many hours a day, so it pays to think carefully about what you will do when you stop working.
Deciding what you will do when you stop working is important, but determining where you will live can be even more important. Now that the kids are grown and gone and the daily grind has come to an end, you may want to look at downsizing into a more suitable property.
Selling the family home and moving into a smaller residence is a major life decision – and not strictly a financial one. Letting go of the home where you raised your children is often fraught with emotional peril, and it is important to think through the decision carefully.
If you are planning to downsize and sell your home, you might want to talk to your adult children first. Your son or daughter may be interested in buying the property and using it to start their own family. If that is the case, you can keep the family home in the family and create a win-win situation for everyone.
If your adult children already have their own homes and do not have any interest in the family home, the decision to sell is strictly your own. You will need to consider a number of things when deciding whether to sell or keep your home, starting with your financial situation.
Many retirees find that they are house rich but assets poor. They may have a small monthly pension and a few investments, but the bulk of their net worth is tied up in the family home. If you are in that situation, selling the home and downsizing to a less expensive property makes a lot of sense.
Even if you are financially secure and do not need the money, downsizing to a smaller home could be a smart move. If you have a large home, you may no longer want to spend your days cleaning and caring for it. Moving to a smaller home could free up more of your time and allow you to live a more active life in retirement.
In the end, the decision to downsize or stay where you are is a deeply personal one. Some retirees would never dream of selling the home where their children grew up. Others are anxious to move on to the next phase of their lives. They may dream of living in a warmer climate or doing more traveling. They may find the companionship of a senior housing community attractive or need a home that is easier to clean and take care of. No matter what the situation, it is important to look at all the factors — from financial considerations to emotional concerns, before downsizing in retirement.