When is the right time to Downsize my Home for Retirement?

The 5 Key Considerations when planning to Downsize

1. Financial – Does it make sense to downsize your home now from a dollars and cents point of view?

Your financial position relates to both your assets and income. Do you own your home outright? If not, how much do you still owe? How much do you have in your Superannuation Fund? Are you still working, or, do you have regular income coming in from other investments?

Owing money on your property after retirement is not ideal, even if you have properly planned on covering your payment for the remaining period based on what you will be drawing as income from your super and any other income stream.

Interest rates may rise enough to put great strain on your drawings/income and property values can decline, meaning if you have planned on a certain return when you do sell, there may be a significant shortfall.

There are many financial variables to consider when planning the timing of downsizing your home for retirement. It is wise to consult with a certified financial planner to identify the best way forward from a financial perspective.

While Paul will take care of everything for you from a Home Downsizing ‘Real Estate’ point of view for areas around Brisbane including Mount Gravatt, Eight Mile Plains, Mackenzie, Rochedale, Springwood, Daisy Hill, Slacks Creek and Underwood “Call Paul Today”,  we recommend talking to the experts for the Financial Planning side of downsizing for retirement.

Considering the Location… Where do I want to live when Downsizing?

2. Location – Are you planning on a Sea change or a Tree change for your retirement years, or do you want to stay close to where you are now?

Most considerations here will still point towards the Financial side of things. For instance, if you are planning a ‘Sea Change’ move, chances are that where you are going to live may have a higher cost of living than where you are living now.

This may well be the case even though you are moving into a smaller property. Higher cost of living is common in areas that have all of the available facilities as well as being handy to the water.

On the other hand, if you are living in or near the City and are planning on a ‘Tree Change’ and retiring in the country, your cost of living will most likely go down. Either way, it is important to understand all aspects pertaining to your planned downsizing whether you are moving great distances or close by.

Prioritise Events to make sure you are making sound Decisions

3. Events – What are your circumstances at the moment, what events are taking place for you as you are heading to retirement?

Change is inevitable for us all. Some of us handle change better than others. When it comes time to making major decisions like moving to a new house, for instance, it pays to pause and consider what else is going on for you right now. Too many changes all at once can be overwhelming and trigger some bad decisions.

Sometimes it is simply a matter of prioritising what you need to deal with first, second and so on. The main thing is making sure that you are not being rushed into making any of the big decisions.

The resounding message here is to take the time and effort to plan properly! This is the rest of your life we are talking about?

How is your Health as you consider Downsizing your Home?

4. Health – What shape are you in now and are there any health matters to be considered when planning your downsizing?

Your health can have an impact on quite a few areas of planning the retirement chapter of your life. In particular, if you are looking to relocate to a different location, is the environment going to be good for your health.

If you have any health conditions, is the move going to improve your quality of life? Are there sufficient facilities to cater for any ongoing treatment you may need? As we get older, typically we become more dependent on health support services and it definitely pays to make sure you are going to have your bases covered.

Are you better off to downsize before you retire while you have the vitality to get the job done on your own terms before it becomes an absolute necessity? Or is it better for you after you retire because you are healthy enough and that way you will have the time on your hands to work it out the way you want?

What Lifestyle you would like when Downsizing your Home?

5. Lifestyle – Have you given yourself the opportunity to think about how you would like to live in retirement?

Retirement is here on your doorstep and soon you are going to have all the time in the world to do whatever you want. The house that used to be fit for purpose is now way too big and you know it will be great for another family to move into with a little sprucing up.

Apart from all of the considerations pointed out in points 1 to 4 above, it is equally important to let yourself visualise what sort of place you would love to live in. Consider everything from the property itself through to the environment, climate, community, facilities and all of the lifestyle factors that your heart desires. When your planned life of retirement is proven sustainable with a solid financial plan, you are well on your way to a happy and stress-free retirement.