It seems like everyone is talking about downsizing these days… some as a result of a new consciousness because of the recent recession, but much of it as Baby Boomers prepare for retirement. With kids gone, and sometimes a spouse, they are deciding they don't need that much room any more… and the money from the sale could help with retirement funds.
But before you jump in because everyone is doing it, ask yourself some questions to determine if it is really the right choice for you.
1. Will it help you financially? Does it matter?
It is easy to think that selling and moving to a smaller home will result in saving money… but that isn't always the case. Smaller isn't necessarily cheaper… you may not get as much as you expected from selling your current home, and your new home may cost more than you were expecting. Monthly expenses may not go down as much as you expect. Before making a decision to move meet with a Realtor to assess how much you can realistically expect to net from the sale of your current home… AND go window shopping for a new home to see how much you can expect to pay for what you want… does the move make financial sense? Even if you don't end up saving money it can still make sense to move depending on your priorities but make the move with an awareness of how it will affect your finances.
2. Are you ready for the emotional pain of dismantling your life?
It's hard work sorting through everything you have accumulated over the years. Although it can be very liberating and cathartic, it is also often overwhelming. Sometimes children have big objections selling the home where they grew up. They may be in transition themselves and have a hard time dealing with yet another change in their lives. What about your lifestyle? Successful downsizers are usually ready for the adventure of something new for the next phase of their lives. If you love your current lifestyle and having all your stuff around you, downsizing could be a painful experience… you could miss your old lifestyle and stuff.
3. Choose a place that fits the lifestyle you want for the next phase of your life
Do you want to maintain your current lifestyle, just in a smaller space, different location? Maybe your next home isn't even smaller, it's just arranged differently so there aren't as many steps, there is more room and easier access for children, parents, grandchildren to gather. Think not only about the space itself, but about what is around it… what do you want to be doing, do you plan to spend most of your time at home or elsewhere? Are you looking for a home where you can age in place, or do you plan another move when that becomes a necessity?
4. Allow for some personal space
Especially if you are a couple downsizing for retirement, you will likely be spending more time together than ever before… and in a smaller space. Think about 'getaway' space for each of you. It doesn't have to be big, but you should each have at least a personal corner where you can go to have some time alone to relax, recharge and focus on what gives you personal satisfaction.
5. What will you do if you don't like your new home?
Recognize that it is possible you may not be thrilled with your new home, especially if you are moving to a new community far from your current social network. Hopefully you will build new friendships and develop your interests… that might be precisely why you are moving. However, don't feel you are a failure if you find you miss your old community and want to move back after living in your dream destination for awhile. The 'boomerang' effect doesn't just happen with children moving back home… I have also experienced it fairly often with retired adults. They move away to their ideal retirement destination only to find they miss being close to family and longtime friends… and end up coming back. It doesn't mean you shouldn't try it… but don't feel like you have failed if you decide to come back, you will have just broadened your experiences. When you buy you should always be thinking about resale… if you decide to move again, will your new home be easy to sell? Will you financially be able to do so?