Downsizing for retirement is a rite of passage most of us take. But it doesn’t have to mean moving into a retirement home. There are many exciting, new doors to consider – you just need a few tools to help you open them.
The Baby Boomers, famous for bringing life to the suburbs post World War II, are in the process of retiring. A Demand Institute report indicates 37% of these people are planning to move from their current homes with half of these looking to downsize. If that’s you, here are a few things worth considering.
Figure out what your financial and lifestyle goals are. Do you want to be debt-free or are you prepared to have a small mortgage? Is a nomadic lifestyle on the cards or perhaps a sea-side condo is more your style? Take the time to develop these goals; stick to them and the process won’t seem so tough.
Run the numbers! Yes, you might save money on bills in a smaller property but you also need to consider downsizing costs such as real estate and moving fees. Also consider where you might be moving to – is new furniture required; is the area you are moving to come with a higher cost of living; will travel costs to see family be higher? Using a retirement calculator might help.
Get in early. When planning for retirement, consider purchasing a new property while you’re still working. This obviously makes a mortgage more manageable. Furthermore, if the property is of lower value than your current home and has rent potential, it could set you up very well for the future financially.
Retirement is an exciting time; if downsizing is on your agenda, please give me a call as I would love to help!