Downsizing In Retirement: Tips To Make It Work For You

Maybe your downsizing dream means a little cottage on the beach?

We can’t begin to tell you how many clients are calling us to say they’re thinking of downsizing.

They want to talk to us about their plans for buying a new home and changing their lifestyle. Our job is to make sure they can afford to do everything they’re dreaming about.

But here’s the surprise.

“Downsizing” means different things to different people.

It doesn’t always seem to mean moving to a smaller or less expensive home.

What it does seem to mean to most of the people we work with is moving to a place that’s easier to maintain, more fun to live in, and offers ample social and wellness opportunities.

Preparing for the “fun” stage of retirement

We’re encouraged to see how many clients are setting the stage for the “fun” chapter of retirement that they see just around the corner.

Some talk about selling their current home and traveling around the world for a year or so.

Others plan to move to a retirement community that’s chock-full of clubs, activities and events (imagine getting around by golf cart instead of by car). Others dream of escaping the traffic and stress of urban life to be closer to nature, hiking trails and outdoor activities.

And of course, many chose to stay in their current community, but look forward to ditching the big yard and empty bedrooms for a more compact, low-maintenance residence.

Moving closer to the grandkids

In some cases, the desire to downsize is coupled with a move closer to the kids and grandkids. In fact, one-quarter of baby boomers plan to use their new-found retirement freedom to relocate closer to the grandkids, according to Meyers Research and Marketwatch.

Family togetherness is a great thing, but before packing up and calling the moving van, make sure you know what’s involved. Some grandparents find keeping up with the grandkids to be physically more than they bargained for.

Realize as well that younger generations tend to move around more in search of job opportunities. Ask yourself how you would handle it if, after you move closer to the kids, they decide to pack up and relocate cross-country.

Of course, some of the grandparents we talk to are perfect candidates for a downsizing move that puts them closer to the kids. They’re not necessarily looking for that “forever home,” and look at relocating as an invitation to adventure.

If, on the other hand, you want your next move to be your last, you might consider staying in your current community, and finding a manageable home with a spare bedroom and amenities for the grandkids. One happy grandma we work with picked out a downsized home with access to a community pool, playground and room to bike. She would rather stay put and invite the grandkids to visit her.

For a smoother move, coordinate with your financial advisor

Moving usually involves money.

You may need to know what you can afford to buy, and whether you are better off buying or renting, paying cash or getting a mortgage. You may encounter some tricky timing issues, where you’re paying for a new house before you’ve sold your old one. And before you pack your bags for another state, you’ll want to know whether the cost of living and taxes there will put you ahead, or set you way behind.

So here’s a suggestion. Before you finalize your plans, bring your financial advisor into the loop. She can give you valuable feedback on your relocation plans, and can help you avoid making a big, expensive misstep.

Downsizing, along with the big lifestyle change that may accompany it, can be expensive and stressful. Working with a financial pro who can ease your way over the financial hurdles can remove the anxiety, and put the fun back into what should be an exciting new adventure.

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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