For the near 70 million baby-boomers entering the empty-nest or retirement phase of life, home downsizing is a popular trend. Downsizing your home can reduce your mortgage payments and decrease the time you are dedicating to home maintenance tasks. These benefits are attractive no matter what your retirement plans may be. But before you run out and pound that “for sale” sign in the yard, you need to decide what you are looking for in your next home.
Decide how to downsize and make a plan that works best for you
Baby boomers who have decided to include home downsizing in their retirement plan will be likely to stay in their next home for the duration of their lives. For many retirees this can mean choosing a home to sustain them for 30 or more years. There are some critical questions to ask yourself when contemplating how to downsize and remain satisfied with your new home for years to come.
- Where do you want to spend your retirement years? Many people use retirement as a chance to move to a different climate or to relocate near children and grandchildren. Others simply want to downsize to reduce space while remaining in the same location.
- What type of property are you looking for? While reducing square footage by moving into a smaller, single family home is adequate for some, a good number of retirees want to be done with home and yard maintenance as well. This might lead them to purchase a condo or a home in a neighborhood overseen by homeowners association. It is always a good idea to review your different housing options your before making a final decision.
- Will you need to store or sell some of your belongings to downsize? This can be a tough decision, but certainly one that needs to be thought through before reducing square footage. Decide what absolutely needs to come with you, what you are willing to sell and what you might be giving to relatives for safe keeping.
Reduce your mortgage payment and more by downsizing your home
If you are looking into home downsizing during retirement, start by talking to your mortgage lender and accountant about your options. Downsizing may not only reduce your payments, but can also lighten your tax obligations. Plus, you may be able to profit from the sale of your current home by using it as retirement income or paying for a new, less expensive home in full, eliminating mortgage payments altogether.
Sponsored content was created and provided by Citizens Financial Group.