6 Ways to Determine if Downsizing Is Right for You

 

Photo credit: Pexels

 

After your children have moved out and gone on to have lives of their own, you might want to start thinking about downsizing. Some folks downsize for a few reasons: the chance to boost financial stability, adjust to retirement lifestyle changes, and make housework or yard work manageable. More seniors are making the choice to downsize. Here are a few things you should consider to see if downsizing is the right fit for you.

 

How Much Space You Need

 

According to USA Today, an important part of the downsizing decision is considering how much space you’ll need. If you’re an empty nester and don’t frequently have guests, it might be better for you. However, if you have guests often or need to use the extra space for whatever projects you might have going on, it might not be a good idea at this point in time.

 

Think about the space you have and how much of it you use. This also might include whatever collections you have: movies, books, or anything else. If you use a room less than once a week, it might not be that important. The same goes for how frequently you access your collections.

 

Crunch Some Numbers

 

Do research online to look at houses in the areas you’re interested in. This can help you get an idea about how much you’ll be spending for your new home. For example, homes in Asheville, North Carolina, have sold for an average price of $296,000 in the last month. Some seniors find that medical costs or a health crisis necessitate freeing up equity in your home to maintain financial independence. This is a case where downsizing is a good option.

 

Weigh the Cost of Living

 

You can save a lot of money by downsizing to a home that will reduce the amount you have to spend on utilities, property taxes, insurance, and regular repairs. Look at the other cost of living in the area you’re looking to move to. If some aspects of it are higher than your current location, evaluate if it can still match your financial plans overall.

 

Look at the Big Picture

 

An important part of considering the advantages and disadvantages of downsizing is to approach it from a pragmatic financial, psychological, and social perspective. Write down your current needs and wants. Consider your family history and what your parents’ needs were. This can help you anticipate the future and see what options are available.

 

Timing

 

You might have children who might need to move back home. Having a larger house can accommodate you better, and the timing might be off. Another big part of the long-term consideration is what the housing market is like when you plan to buy or sell your home. Knowing the best time to buy a home or sell one can have a huge influence on the price that you’re able to ask, and the amount of money that you can save when you buy.

 

What Stuff You’ll Need to Keep

 

There might be some items in your house that won’t withstand the move, and you’ll need to evaluate its usefulness. Some experts recommend choosing furniture that is focused primarily on function. Since many people who downsize need less furniture and have less space, investing in some luxury, high-end appliances is a nice benefit of making the move.

 

If you’ve lived in your home for two of the last five years and are about to move, remember that when you sell your home, you can claim a huge tax deduction. This is based on how much you sell it for and how much money you’ve put into renovations or fixing it up. There are many financial, physical, and emotional benefits to downsizing. The timing might not be right for you now, but it’s always worth considering down the road.