When Is It Time to Downsize?
Most of my work is helping my clients make the right decisions for their family.
Talks of downsizing your home can be a difficult and dreaded conversation, but it is necessary. I work with people all the time who delayed this conversation. Now their house is too big to manage, they can’t keep up with maintenance, and some cannot afford it.
I understand it’s difficult to pull the trigger on such a big decision. Before making any hasty moves, let’s talk through some signs that it might be time to downsize.
Cost of Living
I think we can all agree that the elephant in the room is cost.
Most professionals agree that up to 30% of your monthly income should be allocated to living expenses. This might not be an issue while you’re still working, but that percentage can get too high for retirees.
This can lead to other problems, like having little to no leftover cash for savings or fun.
When the cost of living gets too high, many retirees find themselves needing to convert their equity into cash just to survive.
Don’t wait until it’s too late. If the cost of living in your home is getting too high, it might be time to downsize.
This one is especially difficult.
As we age, our bodies don’t work like they used to, which makes maintaining our homes that much harder.
If you are falling behind on upkeep for health reasons, or they’re just too expensive, it might be time to talk about downsizing.
Don’t wait too long. Your home will only continue to deteriorate and you could lose out on some hard-earned equity.
Back in the day when your kids built blanket forts in the living room, the bathrooms always had a waiting line, and your teens fought over who controlled the TV remote, there were times that your spacious house felt too small to contain that much chaos.
Now that you’re only using a handful of rooms in your house (master bed & bath, kitchen, living room), it doesn’t make sense to pay for heating, cooling, and lighting for rooms you don’t even use.
You might also find that you avoid parts of your house altogether due to lack of accessibility.
Choosing to downsize and when is difficult and tricky. I suggest working with a Fiduciary Financial Advisory to help you play your cards right.
It’s not about how much you earn, it’s all about how much you keep to enjoy your retirement.