If you’re close to retirement age and you feel uncertain about the constantly changing news about the possible pending recession, inflation, and lay-offs, you’re definitely not alone. You may be nervous about what the economy may look like in the near future and how it will impact your retirement or how long you’ll have to keep working. If you’re still paying a mortgage and you’d like to retire within the next decade or so, one possible option is downsizing your home. If you’re curious about this option and if it may be right for you, read on to learn the benefits:
1. Stop worrying about a mortgage
First off, if you have the cash reserve to pay off your mortgage, you should do it. If you’re waiting to pay your home off because of the taxes, the benefits of that don’t outweigh the debt of the mortgage in uncertain economic times. Whether you have a mortgage left, or not, if you were to sell your current home and move into a smaller and more cost-effective home the worry of your mortgage is never one you have to focus on again.
2. Save money
Some financial experts recommend that you focus on downsizing your home 5-10 years prior to your planned retirement age. If you were to sell your home ahead of retirement and downsize into a smaller home without a mortgage, then you can have a few more working years to save the money you’d be putting into a mortgage. For example, if your downsized home is $100,000 less than your current home then you’d have 5-10 years to invest or save the profit you make from the sell and also not have to worry about a mortgage anymore.
3. Downsizing a home means less costs all the way around
Aside from just your mortgage or monthly payment, when you downsize your home then everything may be more cost effective. For example, taxes may be cheaper in a smaller home. Overall maintenance is cheaper in a smaller home too, for example if you decide to downsize from a large family home to a reasonable townhome then you don’t have to worry about snow removal costs, yard maintenance and ongoing costs that would persist into retirement as well.
Also, if you currently own a large home due to having had children and relatives who lived with you at one point, and you’re now an empty nester, then downsizing your home is helpful in heating costs as well since you’re probably heating entire rooms of your home which you no longer use regularly.
4. Equity still exists
Remember that downsizing a home is not the same as going back to renting so even when you downsize a home you’re still getting the same benefits as a homeowner. In a smaller home, you’re still earning equity and you still have the stability of being a homeowner.
Do you have concerns or questions about if resizing your home is right for you? Are you in the market to buy or sell your home? Call and text me at (720) 323-4176 or email me at [email protected]