Determining whether or not to sale your family home and move into something smaller in retirement is difficult. And with so many mixed messages out there when it comes to downsizing, it’s enough to make even the most well-prepared logical person question their choice. The easy answer is, not everybody should downsize. Location, priorities, health, and financial obligations are important factors to consider. So, should you downsize or stay put? Ask yourself these questions to help you make an informed decision.
5 Questions to Ask Yourself to Help Make an Informed Decision
Is the location of your family home ‘healthy’?
Consider your future physical and medical needs as you age and whether or not you’ll be able to navigate the house for daily activities. Do you have stairs to climb? A large lawn to mow? On-going house maintenance? How about your proximity to medical care? Are you close enough to family and friends so you won’t feel isolated? Even though you may be fit and healthy now, your future health is definitely something to keep in mind when thinking about downsizing.
Do you need to stretch your nest egg?
Reducing housing costs – mortgage, taxes, utilities and maintenance – by selling your home is one the easiest ways to increase your funds. If you’re falling short on your projected retirement budget, then downsizing may be a great option.
Should you downsize for emotions?
Life changing events like divorce, the death of a significant other, or new grandkids can prompt an abrupt desire to sell your family home and move. These events aren’t necessarily a reason to throw caution to the wind and move. After all, downsizing is an important decision, and it deserves some soul searching. Most real estate agents suggest waiting at least a year and then revisit the decision. What if you downsized and moved to a new city or state to be close to your new grandchild, and after a few months of relocating, your son gets promoted and moves his family away. So take a step back and leave the emotions out of the decision to downsize.
What’s does the housing market look like in your area?
The real estate market is improving across much of the country, new construction is rising, and inventory is decreasing. Zillow, an online real estate database, named Raleigh-Cary metro one of the top 10 hottest American housing markets for 2014. Location still very much matters in real estate and before you make the decision to sale your home and downsize to a smaller house, condo, or apartment, do your homework, especially if you still owe on your mortgage. You want to make sure you have money left over after paying off your mortgage, commission, fees, and covering your moving costs. Always work with a professional real estate agent who specializes in your area. She can help you determine the right time to sell and the right price for your family home should you chose to downsize.
Have you factored in lifestyle costs?
You’ve picked the perfect city to retire to. You got a good price on your family home. You packed up your belongings and move away…Only to discover you’ve moved away from your family, friends, and well, your social existence. Now you’re spending a lot of time and money traveling back to the old homestead to socialize. The money you thought you were going to save by downsizing goes to travel expenses. When choosing to downsize and move – whether across the city or across the state border, keep in mind the importance of lifestyle costs. What you get from downsizing may not be saving you anything.