Anticipated and unexpected life events alike can cause major disruptions. Recognizing the signs that it is time to downsize requires emotional readiness and a willingness to try something new. Keep reading for some of these signs.
Financial Opportunity or Necessity
Downsizing doesn’t necessarily mean you can no longer maintain or afford your home—it may simply mean the financial opportunity to sell it is just too good. In the first half of 2020, the combination of a pandemic, low home inventory, and low interest rates created a seller’s market in many areas. If benefitting financially from your home’s capital appreciation has always been a part of your plan, keep an eye on local market conditions to seize your moment.
One alternative to selling your home is to list it for rent, providing you with an extra source of income while you move to a less expensive dwelling. You can hire a property management company so that someone else does the work of finding and vetting tenants and performing maintenance while you collect the checks.
On the other hand, financial necessity may be another sign that it’s time to downsize. You should never have to dip into savings just to pay your monthly housing expenses. A rule of thumb is that your mortgage, homeowner’s insurance, and taxes should never exceed 30% of your income. A seller’s market is the time to reduce housing costs and preserve savings by downsizing.
Maintenance and Lifestyle
Your desired profit in selling your home can whittle away if maintenance becomes too much for you. Peeling paint, rotting porches, or neglected landscaping destroys curb appeal and reduces the value of your home. If you’ve lost a spouse who used to help with these chores, they can become especially overwhelming and emotionally draining. Moreover, climbing that the elegant front staircase that originally attracted you to your home may gradually evolve into a daunting challenge. Plus, when the kids move out for good, dusting and vacuuming all those extra bedrooms become chores, and the kids’ bathroom may fall into disuse and possibly disrepair. Maintaining more rooms than you need stifles your enjoyment of retirement and wastes money on extra heating and cooling costs.
You Live Too Far Away from Family
Worrying about getting help as you age or missing the chance to visit family more often may be reasons to consider downsizing and relocating closer to your support network. Isolation is a serious problem for many seniors and retirees. If you notice you no longer know your neighbors or you find you’re now the “oldster” on the block, it might be time to consider downsizing to a place that would provide you with a more robust social circle and greater contact with family and friends.
Plus, retirement means you’re no longer bound to your job location. Whether you choose the RV lifestyle or were simply counting the days until you were free to move to your dream retirement destination, now is your chance.