Now That The Children Are Gone, Should You Downsize Your Home?

It’s a question as old as retirement itself: Now that the children are gone, should you downsize your home?

Maybe move to your favorite vacation spot to enjoy the sunshine and natural beauty? Or should you stay put, relaxing in familiar surroundings and a community you know well? Today’s retirees enjoy more freedom than ever to choose where and how they live. Many retirees choose to downsize or move to be closer to family and to reduce housing costs. As with most important personal and financial decisions, there are pros and cons to downsizing your home that you should consider.

 A New Home for a New Chapter

 Here are some of the potential advantages to downsizing and moving into a smaller house:

  1. You Could Free Up Additional Capital for Your Retirement

For many retirees, their house is both their biggest asset and their biggest expense. If you have significant wealth tied to your home’s equity, selling and downsizing can provide liquid assets to boost your retirement savings, especially if your home has a high market value and you sell at a good time. However, to make the most of this opportunity, you have to avoid the temptation to spend the windfall immediately. A financial professional can help you determine whether selling your home and socking away some of the profits is a smart move. Though most taxpayers will be able to exclude some of the capital gains on a primary home from federal taxes, a tax professional can offer advice on your personal situation.

  1. You Can Choose a Home That Suits Your Retirement Lifestyle

Many homeowners live close to work or their children’s school. Choosing a home that suits your post work life may be a better financial and psychological fit. Downsizing to a smaller property often means less maintenance, less time doing household chores and more time enjoying hobbies and travel. Your current home or neighborhood may also not be conducive to aging independently. If you’re concerned about getting older, you can consider moving to a continuing care community or a neighborhood with better infrastructure for aging.

  1. You May Enjoy the Simplicity of Starting Over

Now that the kids are gone, do you really need all that space? Many retired Americans enjoy doing away with the clutter of decades and starting over in a smaller home. If you feel as though you own too many things or your home is too big to manage, you might appreciate the freedom of downsizing.

 Home is Where the Heart is

There are also some potential disadvantages associated with selling your home and downsizing in retirement. Think through these potential pitfalls before you post that “For Sale” sign in the yard.

  1. You May Lose Connection with Family and Community

If your family members and friends live close to your current home, moving to a new area could mean losing touch with the people closest to you. Don’t underestimate the importance of feeling connected to the people and places you love. If you have strong ties to your community, you might find it hard to replicate that same sense of belonging in your new locale, especially without the benefit of work or child rearing to foster new connections. Take the time to think about how you would build a support network in your new home.

  1. You May Have Less Room for Family and Friends

If you enjoy hosting big family celebrations or want your loved ones to stay over, a smaller home might make it hard to continue the tradition. Retirees who still support (or expect to support) adult children should also consider “boomerang” home in the future. Think carefully about what role you expect to play in your family’s life after retirement and whether downsizing supports your goals.

  1. The Financial Savings May Be Less Than You Think

Though downsizing has the potential benefit of reducing the time and expense of maintaining a home, it may not save you as much money overall as you might think. Consider the expense of selling the old house and buying a new one, as well as the cost of moving, in your decision. You should also think holistically about car insurance, utility rates and property taxes in your new location. Once you factor in all these costs, you might find that the annual savings aren’t worth the move.

Bottom Line

Think long and hard before making such a permanent and life changing decision as selling your home and moving. If you have considered all your options and believe that moving is the right decision, consider trying out your new neighborhood with a short-term lease before making the move permanent. If you have questions about downsizing and relocating, give me a call. I would be happy to assist you in making the most of this important decision.

#jeffstone #coldwellbanker #cbrbliq #portwashington #manhasset #downsizing #relocation 

About Jeff Stone

I'm a Licensed RE Salesperson with Douglas Elliman - Port Washington/Manhasset. My designations are Certified International Property Specialist (CIPS), Resort & Second Property Specialist (RSPS), Seller Representative Specialist (SRS), Certified Buyer Representative (CBR), Seniors Real Estate Specialist (SRES), Seller's Representative Specialist (SRS) & Realtor Short Sale Professional (RSSP). I'm the Recipient of the 2104 National, Seniors Real Estate Specialist (SRES) Outstanding Service Award. I am a former Executive Chef in the New York Hotel & Restaurant Industry. I was also a Caterer/ Business Owner, supplying foods to the Entertainment, Hotel, Restaurant & for Special Events. I love the Outdoors (kayaking and hiking), Fishing, Cooking, Art, Networking & most of all, Volunteering within my community of Port Washington, NY.
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