How to know when it's time to downsize
As we age, our housing needs change. Is a smaller home the right decision for you?
A friend of mine is in the process of packing up and moving from the home she's lived in for 35 years. It was in this home that she raised her children, entertained family and friends, and participated as an involved member of her community. But her children have long ago moved on with their busy lives, her neighborhood has changed, and long-known acquaintances have moved away.
Now alone, she has decided to move from her large house into a beautiful condominium that, unlike her home, is on one floor so she will not have to navigate stairs. And equally important, there will be fewer rooms to ramble through — it will be cozy. She is very excited.
The decision to downsize is not easy or simple. It's difficult to leave the home you've known and loved, and sorting through years worth of belongings — discarding some, giving away others, and keeping a treasured few — can force one to reconcile with the reality that life, indeed, does move on. This can be both painful and cleansing.
But there are many good reasons for retirees to consider downsizing. It can provide a fresh start, a much-needed new phase in life. And from a financial perspective, retirees often fail to take into consideration the potential drain on resources of maintaining a home. During our earning years, we accept home maintenance as a must-do, and work it into our budget. But when income becomes fixed, it is a good idea to ask ourselves if the financial and physical costs of home maintenance are a wise use of our resources and time. Allowing a home to deteriorate reduces its value. My friend who is moving discovered this when she had to give a hefty discount to her buyers after the professional home inspector they hired produced a substantial list of major repairs. Still, the sale of her home, and the lower cost of her new condo, will give her additional financial comfort.
But downsizing can sometimes be fraught with family conflict. For example, when my friend told her adult children that she wanted to move on, to start a new phase in her life, she was met with mixed reactions. Her daughter expressed concern that her mother had not considered a sufficient number of options before selecting her condo. Her son did not want her to sell the family home.
If you're a retiree thinking about moving into a smaller home, here are a few things to consider:
- Why are you staying in your home? If it is because your children visit once a year, is this a sufficient reason to remain in a home that may be too large for you? Downsizing can help the entire family recognize, and respect, the many phases in life, including aging.
- What is the actual cost of maintenance? Are you letting repairs go unattended that in the past you would have addressed? Are there serious upkeep issues that are undermining the value of your home? Downsizing now can actually protect the value of your investment.
- Location, location, location. Families are often very geographically scattered. Eventually, we will all need care, and living far away from family can create a burden for our children whose lives will potentially be greatly inconvenienced by elderly parents who live many miles away. Downsizing and creating a new retirement life when we are still healthy, clear-thinking, and active can address this issue before it occurs.
- Healthy contact with other people is very important to our mental and physical health. The countless hours we spent with fellow employees, children and their friends, and neighborhood community largely disappear when we retire. Downsizing with thought and planning can be the best medicine.
In the end, my friend made the decision she believed was best for her. She met with a financial planner who provided guidance about taxes and investments and assured her that the proceeds from the sale of her home could be invested wisely. She evaluated her lifestyle and decided that living alone in a big house did not provide her with sufficient contact with active people. Most of all, she recognized that, for her mental and physical health, she needed a change.
Now, for the first time in some years, she is excited and happy. She is choosing colors for paint, carpets, and window coverings in her condo. She feels as though she has a new lease on life. Maybe that is as important as all the serious financial considerations involved in downsizing.