Equity, or the value of your house after the mortgage is paid off, is a source of wealth that can be used as a reserve to help fund expenses in retirement. Downsizing, by moving from your larger home to a smaller and less expensive place, helps to “right-size” both the physical space of the house and reduce financial burdens of owning a larger home.
If you’re in the right house, it may make the most sense to stay. Aging in place has its advantages — and of course it costs money to move — so if expenses are manageable and the house is comfortable “for the duration,” as my mom likes to say, this can be a great option. And one can still access equity with a reverse mortgage or home equity loan.
The Cost of Owning
However, while home equity is often the greatest store of wealth, home owning is also one of the largest expenses. Taxes, insurance, utilities, maintenance and repairs add up.
Downsizing can be a crucial move to free up capital, increase savings and allow you to live a more comfortable (and even more fun!) lifestyle as you grow older.
Fact: Only 17% of Americans over 55 say they’re confident they’ll have enough to live on in retirement.
- Better flow and features, potential one-level living
- Fewer rooms to clean and take care of
- Neighborhood suited to your lifestyle, access to your preferred amenities — such as shops, restaurants, medical facilities, and/or family
- Home equity funds to reduce debt and/or reinvest for retirement
- Free up funds for education, grandchildren, travel, charity (et cetera!)
- Reserve funds for health care costs
- Option to delay Social Security payout, up to age 70
- New lifestyle, new chapter!
- In a Seller’s market, a great price on your house!
The Sooner You Move, the More You Save
Moving is never easy, especially if you’ve lived in the same house for a long time.
It will likely get more difficult with age, both physically and socially.
The sooner you downsize, the greater positive long-term effect it will have on your savings and expenses.
Click here for a handy downsizing calculator.
But I’ve Been in this House Forever. What About All My Stuff?
Moving is a big job, but you don’t have to take it on alone! With the help of a good Realtor, with a network of experienced and qualified professionals, you can get through this process.
Decluttering for Retirement: You could probably do without a lot of the stuff you own, and you may be surprised at how free you feel when you start letting it go.
Need Another Reason to Consider Selling?
With high demand and low inventory, it’s a Seller’s market. Real estate prices in Denver are at an all-time high.
Interest rates are going up this year, and price appreciation is expected to slow this year. Don’t wait any longer to discuss this important decision with a seasoned professional.