Criteria for Downsizing House During Retirement
Your housing needs will likely be different during your retirement than during your working years. A common question for those who are retired is whether they should relocate or downsize their house. Here are some things to consider when making this decision.
Finances
Location
Family
Travel
Finances
Perhaps the most important question about your retirement house is whether you can afford to keep your current home during retirement even if it is paid for. If the house is large, then your maintenance, utilities, property taxes, and insurance costs are going to be higher than for a smaller home. Also, you can sell your home and purchase a smaller home for less money and invest the difference to provide yourself additional monthly income. If your finances will be tight during retirement, then it probably makes sense to downsize your house. That can make the difference between a financially tight retirement and a comfortable retirement.
Location
Another consideration is where you want to live during retirement. Perhaps you live in a high-cost-of-living area and it makes sense to relocate. Other reasons to relocate might include living closer to your children or grandchildren or moving to a safer or more desirable area. Keep in mind that it always costs more that you anticipate to relocate in terms of time, money, and grief. Also, you may not always be healthy and active during retirement. Most of us lose our health as we age and we may need help from others. If children live close by, they may be willing to help us as we age. You may also want to consider an assisted living center at some point. The location of your house will influence the cost, availability, and quality of health care.
Family
Another consideration might be the number of children or grandchildren that will visit you on a regular basis. If you have a decent number of children or grandchildren who live close to you, you may want a larger house when they visit. If you don’t want them to visit, then sell your large house and move into a small condo. That should discourage frequent visits. However, if you enjoy their visits, then you may want to keep a larger house and yard so everyone is more comfortable during the visits.
Travel
Do you want to travel a lot during retirement? If so, you may not want to worry about maintaining a large home and yard while you are away. If you don’t like to travel, you may want a large home and yard since you will spend most of your time there. A large home and yard will require more time and/or money to maintain than a smaller home. Keep in mind that retirement is not static. As your health and interests change, you may not want to travel or maintain as much.
Summary
Deciding your house location and size will influence so many things during your retirement. It will impact your finances and determine how often you see children and grandchildren, how often you travel, how safe you are, and how you receive assistance or needed health care. All of these factors should be considered as you make this important decision for retirement.
