Published On: Wed, Mar 2nd, 2016

The Kids are Grown Up; It’s Time to Save More Cash

Downsizing in LehiThe kids are all grown up, your back aches from mowing the lawn, and you’re tired of cleaning an empty house. So, why not downsize?

study from Merrill Lynch and Age Wave claims that half of the total population who move upon retirement switch to smaller homes. One of the primary reasons behind downsizing is cost cutting. Booming real estate prices results in bigger payoffs and many baby boomers would rather invest in home equity. After all, it’s where their wealth is.

Downsizing, however, is not without the accompaniment of difficult decisions that need to be made. One wrong move can cost you or even force you to relocate. It pays to plan ahead to avoid any mishaps.

A Smaller House is Still a Home suggests downsizing with a retirement house as a start. There’s no point in paying for space in Riverton or wherever else if you don’t even need it. Even if you pay off mortgages completely before retirement, you still have to deal with home insurance, utilities, property taxes, and maintenance.

Condominium units are cheaper than single-family homes. You don’t have to worry about replacing the boiler or cleaning the gutters. Shared maintenance and rent will become your primary concerns.

Moving to a smaller home guarantees less expenses. You spare yourself from added responsibilities and payments. You get more time for yourself and money for other expenses.

Now or Never: When to Leave

Some retirees have serious hesitations about leaving their homes. The sentimental value plus the hassles of moving stop them from doing it sooner than later. But if you wish to downsize, do it sooner so that you get more time to prepare—physically, emotionally, and mentally.

The stress now forces you to ensure that your new home has features worth your money: step-in showers, rooms in one level, and wide hallways. The local community should also be in proximity to good medical care and public transport.

Rent or Buy?

If you’ve owned a home, you might think buying is better. But sometimes, renting is the better option—especially if you want to stay close with children who might move in a few years. If you have home equity but little in retirement savings, add the proceeds of your home’s sale to your portfolio rather than splurge on a new house.

Retirement should not add trouble to your finances. Downsizing guarantees you cut down costs, save more cash, and enjoy the comforts of home.

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