Downsizing after retirement: A decision best made with careful consideration

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Retirement can be a happy time. Earning downtime not steeped in paychecks and limited vacation days has a nice ring to it.

But what about home? As Nerdwallet’s Kate Ashford explains, while home is your sanctuary it’s also one of your biggest budget items. Has it now become more house than you need? When is it smart to downsize, and will that truly benefit you?

“It’s important to be clear on what you want,” says Ashford. And while goals are crucial, there are a number of pathways to take. Here are a few questions to ask yourself before putting up that “for sale” sign:

(1) Are you in a cash flow bind? Now that the regular checks have stopped, you might find that rising prices make you feel squeezed. Perhaps your homeowners’ insurance premiums are exploding, or paying high property taxes is starting to usurp the kind of relaxation you had in mind.

If this is the case, weigh the mortgage, property taxes and insurance, plus basic bills like electricity and water services for your current and future homes. By moving somewhere less expensive, you might find a reasonably-priced home with much lower taxes and insurance rates, permitting you to breathe a bit easier.

(2) Is your area pricey? If so, you have a better chance of selling your home and finding something cheaper. But look before you leap; inventory is low in many places, and competition is steep even for a smaller home with upgrades. And if you “buy into” a planned community, those homeowners’ association fees will never go down.

“To save money overall, the value of the home you’re purchasing should be at least 20% less than the house that you’re selling, " says Ashford’s interviewee CFP Diane Pearson.

(3) Is it no longer safe to live there? Perhaps your health mandates a home with fewer stairs, a first-floor primary bedroom or an accessible bathroom. Mobility is a huge consideration as you age.

(4) Would you prefer to move closer to family? While it’s a good reason to downsize, it’s not necessarily a cheaper option. Moving costs plus the cost of a new place to live can add up even with all that cash in your pocket from the sale of your current home. Only you can make that value trade-off because once you make the move, there is no looking back.

(5) Are you prepared to create a new support network? Don’t forget that if downsizing means a new city, you may have to rebuild your community. New friends, new medical professionals, and even a new gym are all trade-offs.

Nerdwallet, Cleveland.com, TBWS


All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.

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David D'Angelo

HMAC Social Media Manager

NMLS: HMAC #1165808

Home Mortgage Alliance Corporation (HMAC)

4 Hutton Centre Dr, Santa Ana CA 92707

Company NMLS: 1165808

Office: 800-900-7040

Cell: 310-980-7157

Email: info@homemac.com

Web: https://homemac.com

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David D'Angelo

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HMAC Social Media Manager

NMLS: HMAC #1165808

Cell: 310-980-7157


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