Could A Smaller Home Be Your Best Option?
Tuesday Mar 07th, 2023
A Smaller Home Could Be Your Best Option
Many people are getting to the point in their lives where they need to decide where they want to live when they retire. If you own your home and are getting close to this point, you have a few options to consider.
Jessica Lautz, Vice President of Research at the National Association of Realtors (NAR) and Deputy Chief Economist, says:
“As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millennial and Gen Z children or if they stay put in their own homes.”
Lautz gives you a couple choices: you can move in with family or stay in the house you already have. Living with people in a multigenerational home is becoming more popular, but not everyone can or wants to do it. Staying put may not meet your needs as much as it used to either.
There are other options, though, and one of the best ones for some people is downsizing. It's called "downsizing" when you sell your house and buy a smaller one. As your needs change, you may find that a smaller home is better for you, and moving can help you find the best place to live. Along with the personal benefits, downsizing could also save you money.
The New York Times (NYT) shares:
“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.”
One of the most important parts of retirement is having a good financial situation, and downsizing can help a lot with that. Even though mortgage rates are higher than they were a year ago, homeowners have more equity than ever before. This is a big reason why downsizing is still a good idea. When you move into a smaller home, you can use your equity to lower or even get rid of the mortgage payment on your next home.
These can be great options. However, there are even more. Maybe you find yourself needing just a little more help in your day to day living. Perhaps a retirement community or an assisted living community is more in tune with your needs. The main differences between a retirement community and an assisted living facility are the level of care they provide, the amenities and services they offer, and the price you pay for this care.
If you want to go this route, you might want to talk to Catherine Vertz, who is the Director of Nursing (DON) at Primrose Retirement Community of Appleton and the part-time office assistant for Wizards of Real Estate (and my wife). She can determine the type of assistance you will need.
So, not only is it likely cheaper to keep up a smaller home, but using the value of your home could also make a big difference. The best person to help you figure out how much equity you may have in your current home and what options it gives you for your next move is a local real estate agent.
If you own your own home and are getting ready for retirement, you may have to decide where you'll live. Let's talk so you can learn about your options and look into your options for downsizing.