Hallelujah, you’re finally able to kick back and relax! Now that you’re retired, you’re probably not using all of those additional bedrooms from when your children lived in your home. And if you’ve been living there for a long time, you probably have quite a bit of equity that you could use to make life as a retiree a little more comfortable.
Here are 5 tips for downsizing so that you can enjoy retirement stress-free.
1. Crunch the numbers
Before you do anything, sit down with all of your bills, sources of income, and a calculator. You need to figure out if downsizing is something worth considering. If your house is paid off and your taxes and insurance are relatively low, then it may not be in your best interest to buy a new home – especially not now that interest rates are on the rise!
2. Evaluate emotional ties
Moving can be hard because you’ve spent many years in your home. It’s full of memories and you’ve poured your blood, sweat, and tears into it just to make it feel like home. If you’re on the fence about downsizing, ask yourself if you can leave all of those memories behind.
Of course, you wouldn’t just be leaving memories and all that hard work. Depending on where you move to, you could lose familial bonds and established friendships. Ask yourself if you’re okay with the emotional toll a move like this can put on you and your loved ones.
3. Brace yourself for a big boost in savings
You can ask any real estate agent about the current state of the market, and they’ll tell you that sellers are making out like bandits! It’s a fantastic time for retirees to downsize and add quite a bit to their savings accounts.
With that said, be realistic about how much you’ll walk away with after the sale – especially if you plan on buying a new (smaller) home.
4. Consider how you use your space
If you’re on the fence about downsizing, think about how you’re using your space. If you have a spacious home and have a spare room or two, maybe having a roommate may be a good idea because you can earn extra income and have companionship as well.
On the flip side, if you’re going to host family gatherings or group meetings regularly, that may justify keeping your current home rather than downsizing.
5. Consider renting
You’ve been a homeowner for quite some time now, which requires a lot of work. In retirement, perhaps renting is the way to go. You can hang up your tool belt, sell that lawnmower, and enjoy the ease of renting.
Plus, if you want to move around, renting is a fantastic option because you aren’t tied to one place. You can stay in one place for a year (or however long the lease is) and move somewhere new!
Downsizing can save you big bucks!
Downsizing when you enter retirement isn’t for everyone; it doesn’t always make sense to downsize if your home is paid off and your monthly expenses are relatively low. Sit down and look at the bigger picture – not just your finances. At the end of the day, this is a big decision that will impact your golden years! Hopefully, these tips will help you come to the right decision for you.
William Rivers is an editor with a master’s degree in Human Services Counseling at Maine State University. He has more than 20 years of experience working in the senior healthcare industry.