For some people, moving from the family home is something to do only when you can no longer manage where you are. There is a certain amount of nostalgia built around staying in the Halifax home where you raised your kids, and where you created many of the most important memories of your life. Even as you move through your Boomer years and well into your senior years, you might modify your house to age in place. You think that if you manage to make it through your older years without a lingering illness, you can even stay there until the end.
This can make a certain amount of sense, but it can also deprive you of many of the pleasures of your senior years if you hold on to your house too long. Often, moving to another residence can net you a lump sum of money and reduce your monthly living costs.
“Wait,” you are thinking, “my house is paid for. How can I really be money I had if I sell my home and buy another one or even rent a place?”
A Lesson In Retirement Math
According to Stephen Sass, an associate director at the Boston College Center for Retirement Research, many seniors have the math all on. With thinking about downsizing, “if it makes sense, don’t wait,” he says.
It may seem like a bad move to leave a house with a paid off mortgage for rental, smaller house, or condominium with maintenance or association fees, but living in a house involves paying for repairs, maintaining the yard, paying utilities, and of course, paying taxes. If your family home was in an area with a great school district, paying those taxes made sense when your kids free on now, you can move to a place with lower taxes and with many living costs included.
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Rental units and even condominiums cover many maintenance costs, landscaping costs and often even utilities in rent and association fees. Though you might still have to put in a water heater or a new stove when you need one if you choose a condo, you do not have to pay directly for major outside repairs. What’s even better than not having to write the check for repairs and maintenance? Having to worry about those things! You won’t have to spend a minute trying to find a handyman or hoping your son will be able to cut the lawn this weekend.
Big Annual Savings From Downsizing
As Sass puts it, about 30% of the average retiree’s monthly expenses go for housing. If you move from a $250,000 house the one costing 150,000, you might clear $75,000 after you pay out moving expenses. That would enable you to bolster your nest egg in case you need it later, or to withdraw an extra $3,250 from savings each year. That means if you want to take a trip or buy a new couch, you can do it without worrying that something important won’t get paid. When you throw in the savings on utilities and other expenses from a bigger house, you might be able to save an additional $3,000 per year, for a total of $6,250.
Some people with out of town children and other relatives don’t want to leave the family home because it is a refuge for them when they come home to visit. When the kids come home, they can stay with other relatives or at a hotel. If you feel you want to pay for the lodging, you will be able to use a little bit of the money you’ve saved to contribute toward the cost.
Why Wait To Move?
Besides the monetary savings, other experts point out that finding new housing can mean a whole new world. If you live in the suburbs where young families are replacing many of your old neighbors who have moved or passed away, you can acquire a new peer group if you move to a senior community. If you leave the suburbs where everything is spread out to settle in urban area, you can have instant access to restaurants, culture, shopping, and even amenities such as indoor parking and the doorman. The sooner you move, the sooner you can start reaping the economic and social benefits you seek.
The Time To Get Move Is Now
It makes good sense to downsize your home when you retire. Now is the time to start thinking about the possibilities ahead if you live in a less costly place with lower expenses.
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Roy Thomas SRES® (Senior’s Real Estate Specialist) is a REALTOR® with Sutton Group Professional Realty. Since 1991, Roy specializes in helping retirees with their later in life real estate transactions. Call Roy at 902-497-3031 or contact Roy here