3 Questions You Should Ask Yourself Before Downsizing

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3 Questions You Should Ask Yourself Before Downsizing

Posted by RDW Financial Group
5 months ago | July 24, 2019

You’ve finally reached retirement. All of your hard work has put you into this amazing position where you finally get to live on your own stress-free schedule. Life has changed a lot with this major life change. But should your house change, too? It’s a common move for retirees to move to a smaller house in order to cut costs, but does it actually save you money overall? Before you begin to consider trading your current house for a much smaller one, there are some things you need to consider. The process of moving from a big home to a smaller one is more than just cutting monthly bills – there’s a lot of things to consider including hidden costs, the time and effort it takes to move, the location of your next home, and understanding monthly costs of your new house compared to your old house.

 

Are you interested in downsizing for the remainder of your golden years? Here are some questions you should ask yourself:

 

Will a smaller house actually be less expensive?

Upon first thought, downsizing may seem like the answer to your money problems — A smaller house means smaller bills, right? Well, not necessarily…. Depending on the area you want to move to, your small house may cost close to the amount you’re already paying for your current house. Of course, this is very much dependent on location and the housing market, but it’s something you should keep in the back of your mind. Why move from a big house to a small house when the cost is relatively similar?

 

What extra costs am I willing to pay for?

Do you remember the last time you moved? Renting the moving vehicle, repainting the walls, buying new decorations, spending hours boxing and unboxing your stuff, canceling your utilities and starting them at the new house. It takes a lot of time and effort – and money. You need to consider whether the extra costs you have to pay and extra effort you have to exert are worth it.

 

Am I mortgage-free?

If you’ve lived in your house for a long time, you may have already paid off your mortgage. Therefore, you’re paying much less in monthly bills than you did when you had a mortgage. Moving to another house means starting the cycle all over again. Is paying for a mortgage something you’re not willing to repeat, or is it worth the move to a new house?

 

Of course, these aren’t the only questions you will need to ask yourself if you’re considering downsizing during retirement, but they’re a good way to start thinking about your future and planning accordingly. While downsizing is common among retired seniors, it isn’t always right for every senior looking to cut costs. Just because it’s a common move in retirement doesn’t mean it’s the best move for your retirement plan.

 

Do you need help deciding whether downsizing is right for you? Contact RDW Financial today to discuss the best option for you!

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