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What to Consider When Downsizing Upon Retirement

While 64% of seniors state that they plan to stay in their homes at retirement, around 51% of retirees aged 50+ eventually move into smaller accommodations. Here's what you need to know when deciding to downsize.

Factors to Consider When Deciding to Downsize

Selling your home can shed the extra expenses that accrue with a larger home, such as utilities and upkeep. When researching, consider agent commissions, taxes, and any moving expenses involved. There may be repairs or improvement costs if you need to bring up the value of your house.

If you're considering your options regarding downsizing, check the current market price of your home to see if selling is feasible given the market environment. It's good practice to check back periodically as the market fluctuates. PennyMac’s Home Value Estimator is reputed to be the most accurate pricing tool.

Beware of inflating the value of your home because of sentimental memories. Memories are not what potential buyers consider when determining the value of a home. Starting fresh and leaving your old lifestyle behind can be a difficult choice.

If you're selling because you want to move to a more pleasant climate, you may lose many of the connections you've built up over the years. On the positive side, perhaps downsizing means you can move closer to friends and family if they live in a different city or state.

Keep Up With the Market

Local housing markets often fluctuate, so check what's happening. Find out the average time it takes to sell similar homes in your neighborhood, and pay attention to what other homes in your area are selling for, as well.

Renting Out Your Home as an Option

If you're not ready to sell, consider renting out your home, especially if you don't have a mortgage or have low payments. You could receive a small profit. When deciding to rent, a property manager can help you get the most out of it.

Another option would be letting other family members move in and take over the mortgage payments if you wish to keep the home in the family. If you decide not to move, you're surrounded by loved ones to continue making cherished memories.

Preparing for Future Expenses

Selling your home can free up money for future expenses, such as medical bills or for travel. When you decide to sell your home, you have choices to enhance your retirement plan.

Some Final Thoughts

Downsizing your home may seem overwhelming. Start by determining your monthly retirement budget and the value of your home using online value estimators. If you've decided to sell, begin downsizing your belongings by holding a garage sale, gifting, or donating items that are no longer necessary. Revercare is a resource you can visit for other helpful guides and products for senior lifestyles.

By Lydia Chan | Alzheimer's Caregiver

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