Downsizing is popular among Baby Boomers. As Boomers enter retirement they’re looking for ways to make their lives more manageable and efficient. Baby Boomers focus on downsizing for a variety of reasons including financial and practical concerns during retirement.
What does downsizing mean?
Downsizing is when you purchase or rent a home smaller than the one you currently have. The decision to downsize usually happens for a few reasons. Some can no longer afford or don’t want to keep up with the cost of a home. Others may not want to or aren’t able to care for a larger home. The last group, “empty nesters” tend to opt for this decision because they don’t need the space like they used to. Baby Boomers generally choose to downsize as a part of their desire to move closer to their family or friends. Long-distance travel becomes harder the older you get, and you do miss out on most events if your family lives a good distance away.
When Should I Downsize?
You can downsize whenever you like and for whatever reason you have. There are some important things to note before you decide to downsize. For example, you may want to downsize if all the money you’re spending each month goes towards your house, leaving you with very little for fun activities.
Another reason Baby Boomers downsize is that they’d prefer not to deal with a large yard or a house that needs a lot of maintenance. This doesn’t just mean you lack cleaning. It can mean starting to purchase more items just to fill up your house or not taking care of the yard.
Retirement also might prompt you to downsize. Why? Retirement will cut your monthly payments and you’ll start to live on a more fixed income (you don’t want to dip into savings just to keep a house). Some people have a harder time living on a set income per month and the cost of their bills suddenly becomes more than what they’re bringing in or not enough to live comfortably.
Another reason you know it’s time to downsize is when you’re missing family events because of how far away you are. Time and memories are precious. When we miss out on too much, we tend to feel regret. Some may even struggle with loneliness, especially if they’ve recently become a widow.
What are the Advantages to Downsizing?
There are many advantages to downsizing. One advantage is the money you’ll save. You’ll have a smaller mortgage, property taxes, house insurance, or utility costs. You might get lucky and even save yourself money on maintenance or upkeep services like lawn care or housekeeper. If you’ve been in your current home for some time, it may have increased in value, and selling it could leave you with a lot of equity after buying a smaller home. Chances are, you’ll get to buy your new home outright leaving you mortgage-free.
Another benefit to downsizing is you can finally focus on more fun activities. Since you are saving more money and saving time, you can start to pursue more hobbies or interests. You may want to travel but couldn’t because you needed someone to watch your home, or you may not have had the time or money.
Accessibility is a huge benefit to downsizing. As we grow older, it becomes harder to get around. When you have a large home with many rooms or stairs to get to your bedroom or bathroom, it can become difficult. The new home you downsize to can have only one floor with a seated shower or handicap accessible doors (wider doorways). Sure, you can make these adjustments to your current home but that will require you to put more money into the home. It’s much easier and cheaper to buy a pre-made home built with what you need than to renovate your existing home.
Another benefit is one you’ve thought about over the years but never really got around to it. When you downsize, you have no choice but to declutter. Decluttering can be difficult but it’s necessary to become more organized and you’ll have much more space.
What are the Disadvantages of Downsizing?
There are a few reasons you might not want to downsize. You might be comfortable where you’re at and don’t want to live in a smaller home or get rid of belongings to make the switch. You don’t have to downsize but it can improve your life if you do. However, if you’re deadest against it, then you can look into equity release.
Another disadvantage to downsizing involves the location. You may love where you live but there just isn’t any smaller properties in the area. It may even be the case of there are smaller properties but the value isn’t worth the move.
There are many reasons why someone might want to downsize. Luckily, downsizing has many advantages over staying in your current home. While downsizing comes with little disadvantages, some people still don’t want to move. However, downsizing is still something that you should consider if you want to save more money and have more free time to spend with family or your hobbies.