Downsizing − Where to Live

It made sense to look for a bigger house, yard and vehicle when there were kids, but in retirement, smaller can mean less expense, less to worry about and more freedom to do the things you want to do.

Why downsize?

People downsize for many reasons:

• Mortgage − Having smaller mortgage payments, or no payments at all, can free up a significant amount of additional income. You may also save on insurance on a smaller, less expensive home, or just contents if you rent.
• Capital − Downsizing may create capital.
• Maintenance − A smaller home with a smaller yard means less time spent on cleaning and maintenance and more time for a fun, active retirement.

Things to consider

Downsizing may be smart economically, but how about emotionally? Ask yourself which of the following might affect your decision:

• Family − Is your home going to be the center of activity during holidays and vacations? How often will you host visitors and events?
• History − Have you ever lived in a smaller home, and is it something you can realistically do?
• Belongings − Can you pare down your keepsakes and belongings to fit comfortably in your new home?
• Neighbors − Can you tolerate new neighbors and possibly some noise? Will you miss current neighbors and be far from your circle of friends?
• Pride − Can your ego live comfortably in a smaller home? Pride of ownership is no small matter.
• Lifestyle and hobbies − Are your interests and activities home-based? How much room do your hobbies need? Can you trade a grand piano for an upright? A garage full of tools for a closet full of them?

If the shoe fits, wear it

Downsizing isn’t about living your pre-retired life in a smaller space. It’s about using your resources in new ways as you transition to the retirement lifestyle. Carefully weigh the benefits to see if downsizing is the right fit for you.