Many retirees are faced with a big question: whether or not to downsize their homes. Before deciding to downsize, it’s important to consider the many positives and negatives that come with this lifestyle change.
Keep reading for a few pros and cons we’ve compiled.
Downsizing Pro: Saving Money
Smaller homes typically have smaller mortgage payments, which can increase your positive cash flow, according to Elizabeth Weintraub, a former writer for The Balance. Weintraub goes on to say that utility bills are also usually lower in smaller homes since there is less wasted space.
With the money you save on bills, you can spend more on the hobbies or activities that you enjoy. As an added bonus, reducing the amount of energy it takes to cool or heat your house is great for the environment.
If you do decide to buy or build a home, you can save additional money by applying for the Welcome Home Program, like the one we offer at Minster Bank. Through this program, you could apply for up to $5,000 or up to $7,500 for eligible veterans.
Downsizing Con: Limiting Your Space
Downsizing, of course, entails moving into a home that has less space to move around in. Some people may find that their new house feels cramped.
There may not be as many rooms to spread out in, so it could be more difficult to find a quiet place to relax and spend time away from loved ones. Weintraub also cautions that the limited space reduces your ability to host guests.
As such, if you throw a get-together at your house, you likely won’t be able to have as many people over, and you might not have a guest room to offer.
Downsizing Pro: Reducing Your Stress
Writing for Money Talks News, Emmet Pierce says that downsizing can ultimately lower your stress level.
Liliane Choney, executive director of ReVisions Resources, notes that organizing your new home and throwing out unneeded possessions allows you to live more comfortably.
Furthermore, there are fewer responsibilities to take care of in a smaller home. There’s less to maintain and clean, which can also help reduce your stress.
Downsizing Con: Selling Your Belongings
In order for your belongings to fit inside a smaller home, you would probably have to get rid of some possessions.
Tom Sightings, a contributor to U.S. News & World Report, also says that some items may not match the look of your new house and may need to be replaced.
Even if you do sell, donate or throw out everything you can, you could still wind up not having enough storage space or leaving a few of the items you can’t bear to part with in packed boxes.
Downsizing and Retirement: Is it Time You Start Thinking About Downsizing?
Keeping all of these pros and cons in mind can help you decide whether or not downsizing is right for you – and they may vary depending on your personal situation.
To learn more about the specific impacts downsizing could have on your life, discuss your options with a financial advisor. Our Private Wealth Management Team at Minster Bank is skilled at providing you with professional education and advice, customized to your personal goals.
Contact an advisor today to see how we can help you meet your financial goals.
Published by Minster Bank
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