As adults reach their 50s and 60s, many of them are ready to make a change in their lifestyle and reduce their size. This often means buying a townhouse to reduce maintenance or a smaller one-story house to avoid climbing stairs. No matter your age, it is important to keep your house clean, maintained, and paid for, whether you do the work yourself or hire someone else to do it. Fixing broken shingles on a roof and ensuring that a large patio is constantly cut can be tiring. If you feel overwhelmed or think that you could use your time or money better, it is time to reduce your efforts.
Should you downsize your home when you retire? The answer depends on your individual circumstances. You should consider related costs, intangible assets (such as freeing up the cash you might need to travel), and health problems. Weighing all the factors will help you decide if downsizing is the best decision. As you age, your health will become a determining factor in all decisions. If you (or your spouse) have mobility issues, a two-story house probably isn't the best place to live.
You can make accessibility adjustments, but the costs could be high. When Kevin and Sue Hanrahan retired at age 55, they intended to reduce the size of their three-story home in Ashburn, Virginia. After retirement, you tend to have less income, which is why downsizing is so popular if you have a large house with space you don't use; if you're rich in assets but low in cash, reducing staff frees up your capital and allows you to live more comfortably. However, even with the additional expense of a management company, it may be better than paying sales costs, and you can continue to benefit from the increase in the value of your home. Much of the competition is for lower-priced homes, which means that retirees looking to downsize face first-time homebuyers.
If you plan ahead and reduce your workforce five to 10 years before you retire, you can save thousands of dollars each year. Lazaroff also said that he is seeing retirees more often take a lump sum from their retirement account to finance the purchase of their reduced home. This is a common reason homeowners reduce their size, as physical or age restrictions can make it difficult to regularly clean a large home. If you've considered reducing your workforce but aren't sure when is the right time to do so, here are some tips that can help. It would make sense if reducing expenses meant freeing up money for other things such as family vacations or caring for grandchildren. Peterson, who lives about four miles from his daughter, was reduced from a larger house in an active adult community in Atlanta to his townhouse, which has two bedrooms, three bathrooms and a garage.
If you want to downsize to save money in the long run, you need to make sure that these initial costs are affordable and that your long-term expenses are reduced on your new home. In active adult communities, where residents generally must be 55 or older, the average home size is 1,500 to 1,800 square feet, Carmichael says.