When to Downsize Your Home – Getting older means being free from a lot of obligations. For one thing, once you retire, you never have to worry about commuting again. You probably also will live alone or with only your partner. So if you chose your home because it was big enough for your family, only a short drive from the office, or in a neighborhood with good schools and parks, you might be looking at it and wondering whether it’s still the right fit for you. Wouldn’t it be more sensible to sell the old place and trade it in for something smaller, perhaps in a less expensive area? Then you could have a tidy leftover profit.
It’s not as common a move as you might think. According to a survey by Merrill Lynch, 64% of retirees plan to keep their home, and almost half of those who move choose a place that’s as big or bigger than their old one. But here are a few questions to ask when deciding whether to become one of the nearly one in five retired Americans who does decide to downsize.
- What’s my new income? In 1937, the National Housing Act defined affordable housing as housing that costs less than 30% of a family’s monthly income — a ratio that’s still accepted. Your retirement income is probably less than your salary was, so you may suddenly find that your mortgage eats up more than 30 cents out of every dollar you get. Unless you plan to spend your retirement counting pennies, that could mean it’s time to downsize.
- How much money would I save? Of course, if you do decide to move, you’ll need to know what your current home is worth and where you can afford to move. The market value of your home has almost certainly changed since you bought it, so check listing sites to learn about home values in your area or hire an appraiser. Meanwhile, look at listings from the area where you want to move and start doing the math on how much profit you’d pocket.
- Why is this home so cheap? Any savvy homebuyer knows to ask some pointed questions about an inexpensive home, but seniors have a few extra things to worry about. The biggest is choosing a home that’s in good repair. When you’re newly retired, it might sound fun to buy a fixer-upper on the cheap and spend your newfound free time turning it into a home, but when you’re a bit older, the thought of scrambling up a ladder to fix the roof might not be so charming. It’s also important to choose a home with a one-story, accessible layout.
- Where would I move? Most seniors choose the South and West, with Florida and Arizona being the most common, according to financial advisory firm SmartAsset. This is probably due partly to the weather and partly to those states’ low taxes. However, seniors move all over. With career planning out of the picture, you’re free to choose a neighborhood with the things that make for a good retirement: a low cost of living, good infrastructure and amenities, and probably a high proportion of seniors already living there.
Like all types of moves, downsizing for retirement is a big decision. Consult your financial adviser before you make up your mind.
Did you enjoy reading, When to Downsize Your Home?
Interested in learning more about this subject? Attend our upcoming estate planning webinars!
Have You Properly Protected Your Loved Ones? (FREE Estate Planning Workshop), Trustee and Power of Attorney Training School Webinar, Medi-Cal Webinar, and/or Probate Webinar. Get registered today for our estate planning webinars!
This website is not intended to be a source of solicitation or legal advice. General information is made available for educational purposes only. The information on this blog is not an invitation for an attorney-client relationship, and website should not be used to substitute for obtaining legal advice from a licensed professional attorney in your state. Please call us at (626) 403-2292 if you wish to schedule an appointment for a legal consultation.
For more information about The Hayes Law Firm, visit our Google My Business page.
Thanks for reading, When to Downsize Your Home!
- Four Famous Probate Cases in History - April 13, 2023
- Wedding Bells, Again? - April 11, 2023
- Tackling Tough Health Decisions With a Health Care Proxy - April 10, 2023
Office hours
Map
The information on this website is for general information purposes only. Nothing on this or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information on this website is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.