In recent years we witnessed real estate prices going insanely high. That’s the main reason why many people are downsizing in retirement and lowering their monthly expenses significantly. There are many factors to consider when making such an important life decision and there are many common mistakes people can make in that process. In this article, we will focus on those common mistakes – how you can learn from them and how to avoid them to ensure that you have a peaceful life after retirement.
Overestimating your property’s worth
It seems easy to fantasize about the high price your house may fetch. There are public websites on which you can easily see information on what homes in your area have sold for in recent months. If you’re not so good with new technologies and online calculators, consult with a local real estate agent for an estimate of your home’s current value on the market. Maybe you’ll need to stage your home before putting it for the sale and do a few simple spruce-ups such as adding fresh paint, pruning overgrown bushes, and decluttering your rooms. You need to have a good retirement plan and stick to it, to avoid ruining your financials. Save yourself money and hassle from the big renovations because the taste of the next homeowner can totally different from yours, due to age difference and other factors.
Rushing the process and overpaying for the new home
Don’t move on impulse and regret your decision later. If your new home has the latest amenities that significantly increase its price, bear in mind what are you ready to pay for and how much. Every little comfort comes with a price, so find a balance and prioritize. When moving to a new area spend some time there first and visit at least a few different homes. When downsizing in retirement, include home renovation costs in your plan – if there will be any.
Underestimating additional costs
You’ll have a lot of costs when buying a new home, and a lot of tax implications. You’ll need to pay legal fees, recording fees, title insurance, closing costs, and other miscellaneous charges. If you plan to have some additional cash from downsizing your home, run all numbers carefully before you start packing for your new home. If you’re sure that you found a good deal then it’s time to hire professional movers such as triple7movers.com to help you relocate. Ask for a moving estimate and include all predictable moving costs in your financial plan. Also, don’t forget about the possible costs in your new home like:
Not thinking practically
When you decide to downsize, there will be a lot of items you don’t want to get rid of, but you’ll not have the place for in a new home. That means you’ll probably need to rent a storage unit. Include storage costs in your budget plan for downsizing. Before you start to plan your relocation and moving items to storage, decide to think and act only practically – declutter as much as you can.
Not hiring help for the moving process
Relocation is never easy. It means moving your whole life to another place, which may be very different from what you are used to. Moving becomes more difficult as time goes by – as we get older we’re slower to adapt and adjust to changes in our lives. That’s why it’s important to find the right way to do this. Don’t exhaust yourself in the process. Decide which moving services you’ll need and make all agreements with a reliable moving company. Just have in mind that the moving price will differ on many factors, such as services you’ll need, the distance that the transport is covering and how many items do you have. It will be so much easier for you to leave the heavy lifting, packing, and unpacking to professionals while you save your health and energy for later chores like decorating and arranging the space in your new home.
Downsizing too much
Think about your plans for the future and your actual needs. What are you passionate about? Gardening? Carpentry? Large animals? Clearly, in those cases, a small condo isn’t a good solution for you. Also, consider your future needs – a pantry, medical supplies, light exercise equipment, collections of items, etc. All these things require space in your home. Think rationally, think forward, and don’t make compromises in areas that are important to you.
Choosing the wrong location when downsizing in retirement
It’s understandable that you want to live in a calm and quiet neighborhood in retirement. Just be sure that your new place has a good infrastructure, and that everything you’d need is not too far. Consider grocery stores/markets, pharmacies, hospitals, proximity to highways, availability of ATMs, etc. You don’t want to drive an hour or two in each direction just to buy a few groceries, and you don’t want to risk your health living too far from medical institutions.
Being too far away from your family
Thoroughly discuss your plans about moving and downsizing with your children and your family. Don’t move to another state before discussing your decisions with them. If you need financial or any other help, talk to them, and find a solution as a family. Financial rewards of downsizing can be huge, but are they more important than being close to your loved ones? Think carefully and be sure in each decision made – to avoid possible later regrets.
Not thinking about future needs
Maybe you feel great right now if you’re in good shape and healthy, but none of us are getting any younger. As we age our health slowly deteriorates. You may have a problem with walking, stability, hearing, you may become visually impaired, etc. That’s why it’s important to think in advance – what needs you may have later and does the new home satisfy them. Maybe you’ll need a service dog, so you need to make sure that your home is fit for that kind of pet. Make sure the entire neighborhood is accessible for wheelchair, avoid stairs and uneven terrain around your home, etc. It’s important to maintain your health and to think for the future.
Advancing age brings new challenges. Luckily, there are many house adaptions for the elderly – to provide a safe environment in their homes, when they decide downsizing in retirement is the right move. By future-proofing your home today, you’ll be ready for whatever your tomorrow has in store for you. Ensure that the home is in good condition when you buy it and be sure to get a home inspection before closing the deal. It will ensure that you don’t need any major repairs in the next 10-15 years. You deserve to spend those years in peace in your safe haven – no matter how big or small it may be.