What to Consider When You’re Downsizing
It’s a question on the mind of many homeowners – at what age should they think about downsizing financially? Whether the house has become too much work or the kids have moved out, there are many factors that go into this decision, and there’s no one-size-fits-all answer, either.
“Let’s face it – we all have a different mindset financially at age 40, 50, 60, 70, and over. We don’t want to give up our lifestyle or home, and we don’t want to move in with our kids for a number of reasons, nor do they necessarily want us to disrupt their lifestyle,” notes Top Broker Terrie Cox, RE/MAX Equity Group.
But when does it get to the point when the homeowner needs to decide to stay in place or make a change? “I would say if you are in your 70s and of right mind, start thinking about this topic,” says Cox. “Get your house in order, and by that, I mean start doing repairs on it and get it ready to sell. Make those decisions now – don’t leave them to your loved ones.”
What to Consider When Downsizing
According to Cox, older homeowners should first calculate how much money they need for retirement, accounting for not only essential expenses but also costs for the things they truly enjoy and provide a fun lifestyle. This involves calculating Social Security funds, current income, and more. “For some of us, downsizing is like you’re still working because you could have extra money coming in,” adds Cox.
For clients with sufficient retirement funds, downsizing could be more about joining a community that offers activities like golf, swimming, pickleball, and so much more. “Senior communities give you a whole new set of friends and a social life,” says Cox. “And trust me – those new friends become your family as well.”
When it comes to financially downsizing, of course, there are several avenues homeowners might take. While some may sell their home and simply buy a smaller one, others may consider a reverse mortgage. “You could live out the rest of your days in your big house, taking the equity out of your house, not making any more payments, and having the bank pay you to live in your house,” Cox explains.
Helping Clients Achieve the Benefits of Downsizing
When working with her clients, Cox uses her own personal experience to illustrate that downsizing is a great time in one’s life – not a bad one. “We still have our children, siblings, and grandkids, but it is another chapter in our lives in downsizing,” she says.
Considering downsizing herself, Cox spends her days gardening and golfing, activities she enjoys and that help to keep her in shape. “However, some days, my body is saying, ‘Lady, get a few small pots to maintain on your patio, and give up this physical weed pulling and boulder moving!’” she jokes. “I love golfing and gardening, but at what time do I just continue the golf, give up the big house and the maintenance, and enjoy my friends and activities?”
Conversations like these are ones Cox has with clients nearly on a daily basis. For those pondering whether downsizing might be right for them, “I would be happy to voice an opinion and help with your options for those decisions,” says Cox. “Give me a call.”
For more information, contact Terrie Cox, RE/MAX Equity Group today.