Your kids are grown, and you’re done working. Do you still need the big house you live in or is it time to downsize?

It can be an emotional and difficult decision deciding to downsize especially if you’re in the home you raised your children in, but sometimes it’s the right financial move.

Here’s how to tell when it makes sense to downsize.

Signs It’s Time to Downsize

You’re Spending too Much on Housing

If your housing costs exceed 30% of your retirement income, it could be time to downsize. Becoming house poor won’t get you anywhere and could cause more financial issues down the road.

Even if you don’t have a mortgage, look at the taxes, insurance, HOA dues, and regular maintenance costs to figure out where you stand.

You Can’t Keep up with the Home Maintenance

Finances aside, if the home is just too much to keep up with, it’s time to move. Whether you’re constantly fixing things in rooms you don’t use, or you can’t keep up with the regular cleaning, it could be too much.

You should be enjoying your time in retirement, not breaking your back trying to keep up with a house you don’t need.

The Average Age of your Neighbors Decreased

If you used to fit in with all the neighbors and suddenly feel like you could be everyone’s parent, it may be time to move. Surround yourself with people in the same stage of life as you and you’ll have a stronger sense of community rather than feeling stuck in an area where you are a stranger.

You Need your Home Equity for Income

If you’re constantly looking at ways to cash in your home’s equity or you’re considering a reverse mortgage, it may be easier to sell the house, downsize, and invest the equity you don’t use so you have more money saved for retirement.

Pros and Cons of Downsizing

Downsizing is a big decision and understanding the pros and cons of your downsizing will help you decide.

Pros:

  • You’ll likely save money
  • It will be less work and stress on you
  • You may find a new community where you fit in better
  • You may have more money to invest in other assets

Cons:

  • It can be emotional to leave your home
  • It costs money to sell your home
  • You must sell in the right market if you want to make money

Final Thoughts

Deciding to downsize is a big decision, but it’s often a smart one. The key is to go slow. Make the decision carefully, even before you retire, so you have plenty of time to plan. Work with a professional real estate agent and lender to find the right home and financing option.

If you can pay cash for your smaller home, you may have money to invest in other areas so you can have peace of mind that you’re set for retirement. Life is unpredictable and knowing you have money set aside for the unexpected is important.

Helping every step of the way.

This link will provide additional assistance: https://www.homesbyfraser.com/seniors-downsizing-55plus-jacksonville-fl