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Quick Guide: How to Downsize your Home for Retirement

May, 1st, 2019 at 5:45 pm

Deciding to retire can be a liberating and daunting decision. The emotions run up and down like a rollercoaster. Compared to building a large home that can be expensive, downsizing can often be a great way to both save money and allow for more travel and family time. The reduction is also significant for those that haven’t saved quite enough for retirement in their post-working years.

We’ve broken down a few helpful tips and things to avoid for getting your home to prepare for retirement.

Tip #1: Avoid Overestimating what your current home is worth

Do you have an emotional connection with your home? It’s effortless to fantasize about how much you can get out of your home when downsizing for retirement. Maybe after numerous conversations with your neighbors that sold their homes for more than asking price, you feel as if your home will also sell for more. When downsizing, be sure to work with a real estate agent that will provide comparable selling prices in your neighborhood. This way, your home will sell faster because it’s accurately priced. A faster way to accomplish this goal is to do a search on Realtor.com or Zillow.com for homes for sale in your area.

Tip #2: Think functional

Do you remember when you first moved out of your parent’s house and went off to college? Remember when you had all of your belongings in a one bedroom and a dorm room? Those days may seem light years away. However, they taught you how to live within your means and that you don’t have to fill up a large home with things you don’t need. Donate unneeded items to charity and get a tax write off or sell them online via Facebook marketplace or have a garage sale. How would you feel about having a home at a fraction of the cost and a pile of money in your pocket from items sold?

Tip #3: Attack your outstanding debt

Do you have any outstanding credit card debt? Downsizing your home and selling items that hold no sentimental or monetary value will free up cash to pay down and off your credit cards. Once you have kickstarted your fixed income plan, assess how much outstanding credit card you have and take the remaining funds and pay off your credit cards.

Tip #4: Get a storage unit

Getting a storage unit may seem counterintuitive to our previous downsizing tips. Storage units are great for storing your valuables and making your new, smaller home, far less cluttered. Think about how great it feels to come home and have your retirement house free of clutter.

Security is also another reason to opt for a storage unit. Storage units are equipped with 24/7 cameras and often are equipped with fencing to prevent theft. You can also lock your individual unit.

Tip #5: Make downsizing a component of your retirement plan

As daunting as it may seem, once you being the downsizing process, you’ll be surprised just how easy it is to implement. Choosing to downsize and move into a smaller home helps you secure the extra funds to travel, visit grandchildren, and engage in leisure activities. A great way to get started is to check out NewRetirement’s retirement calculator to set goals to get you closer to pure financial after retirement.