Downsizing your home in retirement? Keep in mind these useful things!
Many people believe that downsizing will help them pay for a sizable portion of their retirement, but everyone has different reasons for doing so. Regretfully, some retirees are compelled to drastically alter their ideal retirement lifestyle because homeowners frequently reap less than they had originally projected when considering this plan.
Downsizing has been marketed as one of the best things to do in retirement because it’s a fantastic way to increase your retirement fund and improve your living conditions. However, this recommendation doesn’t apply to everyone.
If you’re considering downsizing your home and this is something you’ve been thinking about for a long time, take a moment to reflect on this decision and read the following lines.
Know your goals
You’re downsizing your home, but why? Setting specific financial goals is crucial, regardless of your objectives—saving money, simplifying your lifestyle, or moving to a new location. Imagine your ideal retirement lifestyle, taking future healthcare costs and other financial requirements into account. By doing this, you will have a better understanding of your anticipated costs and how to meet them when making retirement plans.
Determine how much your present house is worth
This may be a little complicated, but there are plenty of methods you can use to find the exact value of your house. While online estimators can deliver results quickly, their accuracy may not be reliable. Therefore, it’s advisable to consult a real estate agent.
Local real estate agents are great at providing a more accurate appraisal of your home’s value! They take into account the assessed value, comparable sales, and any unique features or improvements that online algorithms might miss. If you’re looking to boost your home’s value, don’t hesitate to ask your realtor for some friendly tips. Plus, setting the right asking price can help you sell your home faster, especially in those busy markets.
After knowing the price of selling, check out the closing costs and other taxes
Remember that after a home inspection, buyers may ask for repairs or modifications. This means that in addition to any upgrades or cosmetic changes, you might have to pay for repairs for pest damage or problems with the roof, foundation, plumbing, or electricity. Therefore, it’s critical to be cautious and be mindful of any potential costs.
Closing costs can include paying the remaining balance on the mortgage, property transfer taxes, recording fees, and legal fees. According to most financial advisors, these costs can range from 2% to 7% of the sale price of a home. Any real estate commissions, up to 6% of the sale price of the house, must also be paid at closing.
How much the new home will cost you?
If you’re thinking about downsizing your home and moving to a newly built home, you have to know a couple of things. Measure the area first to determine how many items you can bring into the new location.
However, keep in mind that pricey extras (like pools, extra rooms, or floor upgrades) can raise the cost of your new home well above its initial estimate. Are you considering moving to a new neighborhood? In this situation, it’s typical for builders to offer a lower HOA at first to draw in buyers, so plan accordingly.
Another important thing to remember is that if you’re moving into a home that isn’t new, you may need to do some repairs or renovations here and there.
Make a list of everything you own
This doesn’t sound nice, but if you’re ready to downsize, you might have to bid farewell to some of your belongings. And if this is the case, make sure you know which ones are disposable.
Making a thorough inventory of your belongings is one of the best strategies for seniors selling their homes to downsize. You can make more informed decisions about what to keep and what to part with during the downsizing process if you increase your awareness of your possessions.
To show the extent of your belongings, make a list of everything you own, including items hidden in the basement, attic, or storage units. Choose the item in the best condition after identifying duplicates. Some programs and tools available online can facilitate this process.
Begin the process of decluttering your home
It’s all set, and you’re ready to move? That’s wonderful! After sorting out everything you want to keep and carefully putting it in the boxes, now it’s time to declutter. Consider selling (for extra money) or donating any items that you won’t need in your new home, such as a lawnmower that you won’t require after moving to a 55+ neighborhood or retirement community that takes care of your lawn.
This guideline also applies to items such as antique furniture. Instead of moving with that old drawer, consider donating it or selling it and buying a new one that’s smaller and easier to handle.
Useful tip to remember: Sort through old documents and digitize the most significant ones. Get rid of as many extraneous documents as you can to help reduce paper clutter. Save physical space and ensure easy access to important documents by scanning and storing them digitally.
Now that we’ve stated all the things you should keep in mind if you’re planning to downsize your home, let’s also answer the question, “When should you move to a smaller home?”
Mobility becomes a challenge? Then it’s time to downsize your home
You’ve made it this far in your reading, but you’re still unsure about whether moving from your beloved home is the right move. It’s a tough decision, and a few things could be making it harder. For example, if you’re living in a bigger house with two floors and climbing the stairs is starting to feel a bit harder, it might be time to think about relocating.
A lot of retirees choose residences with senior-friendly features and easy access. The goal of downsizing is to prepare for your future comfort and independence, not just to conserve space and save money. You have more control over the process and can easily select a location that genuinely supports aging in place if you move before a crisis occurs.
You have too many rooms that you no longer use
It may be time to reconsider your space if you pass rooms that used to be filled with laughter but are now empty. Retirees frequently find themselves living in homes that no longer fit their lifestyle after children move out and family get-togethers become less common.
It might not be what you need to hear, but by downsizing, you can make your house fit your needs now, not in the past. Cleaning, heating, and general maintenance are reduced when there are fewer unused rooms.
You want to move close to your family
You’re now a grandparent, and your kids are in another state. The thought of moving closer to them crossed your mind plenty of times, probably, so what better time than now to actually do this? Living close to loved ones in a smaller home can make life more meaningful. Consider weekend get-togethers, mealtimes together, or just knowing you’re close by in case something goes wrong.
Connection and emotional support are vital to many retirees. You can relocate without the hassle of maintaining a large property when you downsize.
Have you decided to say goodbye to the old furniture? Then, a 23-quart lockable bin from OlarHike will be the best solution for you! They stack neatly, seal tightly, and even have built-in wheels for easy mobility (no heavy lifting needed!), making them ideal for tools, seasonal clothing, or keepsakes. The item costs $39.99 and can be purchased on Amazon.
Are you planning on moving in retirement?
Another article that you might be interested in: New Tax Breaks for Retirees, Explained.
