Yahoo Finance I’m a Financial Expert: 8 Reasons Boomers Should Downsize in Retirement
Retirement can be a great time to consider downsizing your home. Your kids are probably grown and no longer live in the home with you. You don’t need as much space, and maintaining a large home can become more difficult as you age.
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However, some baby boomers may be hesitant to make this move. Here are eight reasons why downsizing in retirement can be a good decision.
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Less Physically Demanding
Big homes can be hard to maintain. You must clean multiple rooms and bathrooms or pay someone to do it. You may also have a large yard to mow and weed. There may be repairs that you need to make as your home ages. All of this upkeep can become more physically demanding. A smaller home can be easier to maintain as you age.
“Many retirees want to enjoy leisure time and spend it doing fun activities with family and friends,” said Barbara O’Neill, expert contributor for Annuity.org. “A smaller home requires less time and effort for indoor and outdoor chores including cleaning, lawn mowing, yard work, and home maintenance and repairs. In addition to the time commitment, the monetary cost of general upkeep will likely be reduced in a smaller home with fewer areas to maintain (e.g., bedrooms and bathrooms). Stress levels may be reduced and life satisfaction increased when retirees can spend less time and money on a home.”
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More Free time
Along with the physically demanding aspect of maintaining a large home, there is also the amount of time it takes to maintain it.
All that cleaning, mowing and repairing takes time. Instead of spending time keeping up your large home during retirement, you could be spending it doing activities you enjoy more, like hiking, seeing friends or spending time with your grandchildren.
Save Money
Big homes can also be expensive to maintain. If you can no longer clean and handle the maintenance yourself as you age, you will need to hire someone to do it for you. And the bigger the home, the larger the expense will be.
A large house also costs more to heat and cool, and its property taxes are higher.
You Can Downsize Your ‘Stuff’
Over the years, you’ve probably accumulated a lot of things. This is especially true if you’ve had kids. By downsizing your home, you also have the opportunity to downsize your personal belongings.
“Moving to a smaller home requires downsizing,” said O’Neill. “It would be very difficult to fit four bedrooms worth of ‘stuff’ in a two-bedroom home so some items will need to be sold, gifted, or donated to charity. Downsizing, and the decluttering process that results from it, can be very liberating and reduce the burden and stress of managing a large number of possessions.”
Free Up Equity
Many homeowners have a lot of equity tied up in their homes. If you sell your large home, you can free up that equity for other purposes.
You could use it to help finance your retirement, purchase a smaller home, help out your children or grandchildren, pay any outstanding medical bills, enjoy retirement more or any other reason you want.
Need Less Space
As you get older, you probably need less space. At one time you may have had kids living at home and they required you to have the extra space. They needed bedrooms, space to keep their toys, areas where they could play and more.
However, now that they’re most likely out of the house, you no longer need that extra square footage in your home. Plus, a smaller house or condo might be more accessible to get around as you age.
To Move
Many retirees want to move closer to family or in a warmer climate once their job’s location no longer binds them. Retirement is a great time to sell your large home and downsize to a smaller place in a new location.
You can move to a retirement community, where the homes are smaller and closer together, are specifically for retirees, and may even offer amenities like community events or transportation to local attractions. Or you can move near family to see grandchildren or have support nearby in case of health issues.
A Fresh Start
While some retired homeowners find selling the house they have lived in for years sad, some view it as a fresh start. Retirement is a new chapter in your life. A new home can be a place to make fresh memories.
Some people may find it sad to live in a large house that was once filled with many loud and happy children. A new, smaller house may be a better fit for retired life.
The Bottom Line
Even if you’ve decided that downsizing is the right choice for you during retirement, it can still be overwhelming and scary. Start the process of downsizing early to minimize stress, allow yourself time to get used to the idea, and make thoughtful decisions during the process. Rushing the downsizing process can lead to unnecessary stress and poor financial choices.
If you are still overwhelmed and have the financial means, you can always hire people to help you with this process. Having a team of professionals (like Realtors, movers, financial planners, etc.) can help relieve some of the stress and work you must do yourself. No matter what, moving is a big decision and a big process, but for many it can be the best decision.
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This article originally appeared on GOBankingRates.com: I’m a Financial Expert: 8 Reasons Boomers Should Downsize in Retirement
