Time to rethink downsizing

• You want or need to turn the equity in your property into money

       Up to 51% of older employees had less than $50,000 saved for retirement. In order to pay their costs, some seniors use the equity in their homes, either through a home equity line of credit (HELOC) or a reverse mortgage.

       It’s not an endless pool of money, though. As Kennedy puts it, “a source of income that will last the balance of your life,” homeowners should be advised to convert their home equity into that.

       Downsizing to a less expensive home might be one method to do that. For instance, downsizing ten to fifteen years before retirement might save you $40,000 a year in housing expenditures if you pay $4,200 a month for your mortgage, principle interest, taxes, and insurance

• You are no longer bound to your place by your family or work

       Not only retirees are free from geographically bound career obligations. More workers now operate remotely from home than before the global epidemic began. This gives people the freedom to live anywhere they desire, among other advantages.

       Parents who no longer have children have no reason to reside in desirable school districts, expanding their options for where to buy a new house in a less expensive area.

       Some homeowners can choose a more inexpensive area where homes are not only less expensive, but also where property taxes, utilities, and sales taxes are lower, without even having to downsize.

• You are not fully utilizing the property (unused rooms or amenities)

       Their bedrooms may only be used on rare occasions once the children have grown up and moved out. But you still have to maintain them by cleaning, heating, and cooling them, as well as by paying insurance and property taxes.

       You might not require a home office if you are retired. Maybe your new way of life keeps you too busy to use a home theater or game room. Although they might not fit your retirement plans, amenities like these, along with swimming pools, three-car garages, workout facilities, and fire pits, are excellent selling points.

• You desire to be nearer to your family

       Many Baby Boomers who have retired opt to relocate near their grown children. In actuality, after selling their property, this group is the most likely to relocate farthest. According to the National Association of Realtors®, the trend of relocating close to family started before the pandemic and hasn’t stopped since.

       The Silent Generation, however, is more inclined than Baby Boomers (53 percent) to purchase a property close to family and friends.

       While some older citizens relocate long miles to be close to their grandchildren, others downsize to a condo or senior community in their present city, allowing them to travel to see their loved ones and take in other places.

• Lifestyle Change – You wish to alter your lifestyle

       When it comes to housing alternatives, seniors have several choices. The advantages of age-restricted neighborhoods have already been covered.

       We can occasionally be forced to make lifestyle changes. There are independent living communities, assisted living communities, and nursing facilities where those who require a certain amount of care due to physical or medical problems can find it.

       Divorcing couples may decide it is more cost-effective to downsize to a smaller, more inexpensive property because they no longer need the large house to accommodate a large family.

       Some elderly people move in with their adult offspring, which can benefit both generations by offering built-in childcare and cheaper accommodation. As an alternative, elder home sharing might offer the advantages of cost- and social-sharing.

       Some seniors choose to live in an RV for one, two, or three “gap years.” Describe it as a desire to travel. It may be a cost-effective choice that gives individuals the freedom to uproot their roots and move whenever they like.

       Keep in mind that not only seniors should downsize. Moving into a smaller, more affordable, and low-maintenance home frees up money and time to spend on other things. Working fewer hours can still allow you to pay off your mortgage more quickly. By lowering or eliminating your mortgage payments, you may be able to pay off credit cards and other debt or even retire earlier.

       Or, you might just use the extra cash to go on vacation or do things you enjoy, like going to your favorite restaurants frequently, enrolling in lessons, or taking up a new hobby.

       Practically speaking, downsizing can enable you to set aside money for unexpected expenses (or retirement). If you care about the environment, a smaller home requires less fossil fuel to heat and cool.

       You might simply wish to simplify your life and save yourself the time and work required to maintain a large home. This is one of the things that started the tiny home trend, coupled with cost savings.