Are you living in a house with several empty bedrooms? You might be considering downsizing, but the best age to downsize isn’t always right at retirement. Should I downsize before retirement? You might wait for a while after retirement, or maybe consider downsizing before you retire. Several factors should play into your decision, including the cost to buy and sell a home.
Costs of Downsizing
The costs of downsizing are going to be there regardless of the time you choose to make that move. So, just when is the right time to downsize? The best time is when it benefits you financially. No matter where you decide to retire, whether it’s in the same town, across the state or across the country, you will need to know several things:
- What is the cost of living in the new location?
- How much home can you afford?
- What is your debt to income ratio?
- How much mortgage can you afford if you decide to finance your new purchase?
- Should you pay for your new home with cash or should you get another mortgage?
- How much does it cost to sell my home?
If you don’t have a mortgage now, it may be less expensive to keep the larger home. Compare the cost of utilities, maintenance, insurance and other home costs. Don’t forget to add in the cost of selling your home and buying a new home.
Only you can answer these questions and they should all be answered before you even contact a real estate agent. Once you have done the research and decided to downsize, then you should contact a real estate agent in the area you plan on moving to.
Now that you’ve answered the question, “Should I downsize my home?” you have several other items to consider. For example, are you going to travel? Do you have grandchildren who visit often? Should you consider a rental? Downsizing in your 60s means you may have to hire someone to do a lot of the work you might have done when you were a few years younger – and that means additional costs.
Downsizing After Retirement
Downsizing your home for retirement also means that you have less to do. If you are not one to mow the yard or do some maintenance, you may consider renting. However, if you still enjoy working on the yard and fixing a place up so it’s just right, a smaller house could save you money – in some cases, it could save you more than renting.
Downsizing after retirement also means that you will lose out on some of that extra space. Just because you’re retired doesn’t mean that you aren’t working. If you have a home business, you may need that extra bedroom to use for an office. If the grandkids visit often, you may like an extra room for them to stay in. You might still be able to have that extra room or two even after downsizing if you plan the move right and are able to find a home that meets your needs.
Other things to think about include leaving decades of memories behind and travel costs to visit relatives and friends who live close to your current home. Of course, if you are at the point where you cannot care for a home because of medical reasons or just because you don’t want to, all of this is moot because you’re going to downsize anyway. As long as downsizing is a choice, consider all of the options and then contact a real estate agent at On Point Carolinas Realty to list your home and to help you find a new home.