You may feel like downsizing is synonymous with a reduction in your quality of life or a loss of wealth. However, more and more seniors are opening themselves up to the idea. Having a three- or four-bedroom house when you have several children may make sense, but once they’ve moved out, keeping all that space clean and heated or cooled can become an unnecessary and expensive hassle.
There are plenty of wonderful reasons to downsize. By downsizing, you can:
- Convert your home equity to a liquid asset that you can add to your retirement savings
- Upgrade the quality of your community or home by buying something smaller but more luxurious
- Reduce mortgage and insurance payments, utility bills and fees
- Eliminate the need to maintain your home and yard
- Choose a space that fits your lifestyle, rather than dealing with empty bedrooms, too-large living spaces, etc.
- Start fresh in an exciting new location
- Relocate closer to family and friends
- Set yourself up in a more accessible and/or single-story home where you can live comfortably for the rest of your life
Clearly, downsizing can bring many financial and personal benefits to seniors. But before you get too gung-ho about a new home purchase, you’ll want to take a step back and assess which sort of move is best for you.
Know What the Ultimate Goal Is
The first step toward downsizing is letting yourself brainstorm without any limitations. Envision your future. What town, state or country do you see yourself living in? What does your ideal day-to-day life look like? What sorts of activities would you like access to? What kind of climate do you prefer? Do you feel the need to reconnect with family, or are you inspired to go on another adventure?
The answers to these questions will help you get a feel for which environment and home may best suit you. Once you’ve allowed yourself to imagine what retirement could be, start organizing your thoughts with a list. Sort your ideas into three categories: must-haves, nice-to-haves and do-not-wants. These parameters will help your narrow down your options as you get further along in the process.
Consider All Your Options
Many people view downsizing as a move from a large suburban house to a slightly smaller suburban house. However, it would behoove you to look outside this narrow framework and consider all the possibilities for your retirement. You could choose to move into a:
- Retirement community
- Rental home
- Tiny home
- House boat
- Relative’s home
Not to mention, you can choose to move within your own neighborhood, to a nearby county, to another state or even to a whole different country! Each of these options presents its own benefits and drawbacks. Ultimately, you will be the only one who can decide what’s best for you.
Of course, after looking at your options, you may realize you’d prefer to stay where you are. If that’s the case, you can consider renting out your current home when you’re away on an adventure, renting out a single room or even refinancing with a reverse mortgage to have extra spending money and relieve financial pressure.
Make Sure the Finances Work Out
If you are going through the trouble of downsizing, you want to be sure that changing homes will actually provide a financial benefit, if that’s your aim. You also want to make sure you aren’t over- or underestimating the cost of your new home, or else you may have to move a second time or start working again to afford the difference. Do your research on cost of living in the area you want to live.
Before making a final decision, calculate your current costs and compare them side-by-side with the costs you expect after moving. Make sure to consider:
- Home insurance
- HOA fees
- State tax differences
- Variations in cost of living
Remember that even a smaller home may be more expensive than your current residence if it’s in an urban area or a particularly desirable location. Also, make sure you account for the financial losses you will experience just from moving alone, like realtor fees, moving services and capital gains tax.
Experience the New Location Firsthand
You may think you know where you want to live at this point, but you may also have some doubts weighing on your mind. Perhaps you are still deciding between two or three potential communities. Fortunately, there is no harm in doing a test run to determine which would be the best fit.
If possible, visit your ideal location beforehand just to get a feel for whether you’ll enjoy it or not. You can try staying in a hotel or Airbnb, or if you have family in the area, you could room with them for a week or two. You just want to stay long enough to get a sense of the local community, the available activities and the weather – unless you want to turn this into a vacation, of course!
Find Your Home at Twin Lakes Community
When older adults make the choice to downsize, they often desire a life free of home upkeep and full of friendly neighbors. If that sounds like you, Twin Lakes Community may be a perfect fit. We have a wide range of residences, including garden homes, villas and apartments. We also offer an arc of care from independent and assisted living to nursing and memory care so residents can seamlessly transition between residences, should their health needs change.
Call us at 336-538-1572 to schedule your tour today!