Approaching retirement? Downsizing your home can be your best option.
If you are on the cusp of retirement, you may be thinking about calling a real estate agent and putting your home on the market, but is downsizing in your golden years the best thing to do? Now that the real estate market has rebounded from the 2007 bubble and the mortgage is paid in full or close to it, should you sell the home you worked so hard for, or should you stay put and enjoy the fruits of your labor?
Downsizing into retirement has become commonplace, but it is not the right choice for everyone. There are lots of factors to consider and many things to think about before you make your move. Here are some important considerations as you contemplate downsizing your lifestyle and your home. Contact Mona Koussa, a relocation local broker and downsizing specialist, to help you plan your move. 925-831-9615
Do You Have a Strong Support Structure?
Now that you are entering a new phase of your life, a stable support structure will be more critical than ever. If you want to take off and travel the world, having a trusted neighbor who can watch over your home will suddenly matter a great deal.
If you have spent years in your current home and have built strong relationships with those around you, it can be hard to give all that up. It will take time to create a strong support structure in your new, smaller home, and you may never be able to recreate the relationships you have worked so hard to foster.
Will the Extra Cash Make a Meaningful Difference in Your Life?
One of the most persuasive arguments for downsizing into retirement is financial. For many retirees, the roof over their head is their single most significant asset, and there is a strong temptation to tap that cash.
If you need the money, moving into a smaller and more affordable home and pocketing the extra cash certainly makes sense. But before you make your move, take a step back and think about how will use that extra cash. Will the money you realize from your home sale make a meaningful difference to your life and lifestyle, or will the improvements be marginal at best.
Do not forget to factor things like moving expenses and the cost of upgrades into your downsizing equation. If you have lived in your home for decades, you may need to make some improvements to attract modern buyers. Add that to the cost of moving the essentials and discarding any accumulated junk and the financial picture could look a lot less rosy.
Where Will You Live?
It is essential to think about where you will live once you sell your home and put the money to work elsewhere. Will you stay in the same town, move to another part of the state or head to another state altogether?
According to U.S. Census Bureau, 50% of retires who downsize choose to purchase a home within the same community. For most who to decide to leave California, choose to live in Florida, Texas, New Mexico or Arizona.
If you plan to relocate, how much do you know about your chosen location? Are property taxes high or low? What does the housing market look like? Is the area as safe as where you live now? Is the region senior-friendly, with lots of things to see and do? If you do not know the answers to all these questions, you need to do more homework.
Downsizing into retirement can make a lot of sense, but it is not always the right choice. If you are thinking about retirement, you have some additional work to do. Now is the time to think about where you want to live, what you want to do and how you will occupy all that newfound free time.
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