How to Downsize Your Home After Retirement

Here’s a current conversation my husband and I are having about downsizing our home in Atlanta as my husband retires. As much as we love our home, we are now talking about selling it because we don’t need such a large home with a pool. The pool has become the elephant in the room since we now spend our summers in our second home in Park City. Having too much of a house and a twenty-year-old pool that needs constant upkeep is why we’re thinking of downsizing.

Retiring opens up so many possibilities for building the lifestyle that you want to enjoy in your senior years. Although retirement generates some changes to your income, this is also a time when you have more control over how you spend your money. Downsizing is a lifestyle change that many seniors make after retirement when they no longer need so much space for raising their families. Knowing how to downsize can help you avoid potentially costly mistakes while enabling you to stay motivated to create the life you’ve dreamed of during your working years.

how to Downsize Your Home After Retirement

Many seniors get stuck at the point of making the critical decision to downsize or continue living in their current residence. Although change can sometimes seem scary, the truth is that downsizing offers several important benefits that could substantially improve your lifestyle.

Downsizing provides you with a smaller residence that tends to require less upkeep. Depending upon your choice of new home, you might be able to opt out of having to worry about landscaping. Or, you may prefer not to have to clean multiple levels of floors.

Moving to a smaller home might also be more financially feasible to fit into your new budget as a retiree. This could free up funds for traveling or just to stash away for future needs. Either way, being able to lower your home’s utility and maintenance costs can reduce financial stress as you age.

Start By Defining Your Retirement Goals

Once you’ve decided to move, you’ll want to consider where you’d like to live. Retirement communities offer the best of both worlds for seniors who want to live independently yet close to amenities that might include transportation or an in-house nursing team.

If you are still in good health, then you might also choose to live in a smaller house that is similar to your current one. Buying a home in a multiage residential neighborhood can help you move closer to your loved ones. Or, you might look forward to finally living in your favorite city.

Be Realistic About the Value Of Your Home

Home values have recently been on the rise, but some properties have also lost value over time. As a senior, you might have been living in your home for many decades, or you might still be growing equity. In both situations, it’s important to note that the value of your home might be much different from what you may expect. Some seniors overvalue their home, which is easy to do when you’ve invested in it over the years. However, the upgrades you made may no longer increase the value if trends have changed over time.

Alternatively, you might think your older home has less value than it does. Today, many buyers are flocking to older homes that are located near prime destinations for work and recreation.

Consulting with a trustworthy real estate agent will give you the answers you need to avoid overvaluing or undervaluing your home before you put it on the market.

Factor In the Tax Implications of the Move when Downsizing

Another area where many seniors make mistakes when downsizing is by failing to consider how selling their home and moving to a new location might impact their taxes. Depending upon the value of your home and the profit that you make during the sale, you might owe taxes that impact your gains.

While this is fairly rare, you’ll want to consult with your financial advisor to identify how your home sale will impact your taxes along with potential strategies that you could use to offset any negative effects. You’ll also want to investigate the property tax rates in your new home’s location before you decide to buy.

Weigh the Cost of Repairs Vs. a Lower Asking Price

Many buyers will overlook a slightly outdated color of paint out of the knowledge that the walls are a blank canvas that they’ll decorate after they move in. But, a homebuyer might be completely turned off by a house that has extensive roof damage that hints water leaks to come. During the home appraisal process, you’ll want to identify any needs for major repairs. Then, you can determine the cost to figure out whether you’ll benefit from fixing the house up or selling it on an as-is basis.

Once you’ve begun the process of selling your home and finding a new place to live, you’ll want to start scaling down your belongings. Remember to take things slow and ask for help. As you sort through your belongings, you’re bound to recall many memories that can serve as inspiration for making many more in your newly downsized home.

Until next time!