Downsizing Pros and Cons
Downsizing may be a sound solution for supplementing your income especially when you are retiring. It takes away the headaches of managing a large property and makes your life more manageable. If this option sounds tempting to you, read on to find out why you should consider downsizing in retirement. And why it is becoming an increasingly popular option.
Moving into a smaller home may be more convenient as you get older. You’ll have less space and issues to manage, and less space to clean. Plus, you’ll be cutting down on costs. On top of this, selling your larger home to move into a smaller and less expensive one means you can use the price difference to supplement your retirement income.
The drawback could be that downsizing requires a lifestyle change. This may not be for everyone. Especially if it means relocating or moving away from family and friends.
Keep reading to learn why you should consider downsizing in retirement and click here to learn more about how our estate agents can help.
Pros of Downsizing in Retirement
1. Cutting Down on Running Costs
Your monthly income will most likely drop as you enter your retirement years. Thus, the costs of maintaining and managing a large property may take their toll on your monthly expense budget. Consider whether it still makes sense for you to live in and pay for so much space.
Downsizing to a smaller property will reduce the cost of your monthly bills. Reducing the size of the property or the number of bedrooms alone can save you a lot of money, as smaller homes benefit from lower utility and maintenance costs.
Downsizing can help you save on:
- Utility bills (water, electricity, gas)
- HOA fees
- Council tax
- Mortgage fees
- Insurance fees
- Property maintenance fees
Relocating to a new area where overall costs are lower can also add significantly to these savings.
2. More Convenient Space and Layout
When all the kids have left the nest, it’s time to question whether you still need so many bedrooms. Will anyone be using them? If the answer is no, you should probably consider moving into a smaller home. Otherwise, you will end up incurring maintenance and cleaning costs you really shouldn’t.
As you age, you should look into smaller properties that fit your needs and don’t take too much upkeep. This will save you a lot of money and effort in the long run.
When you downsize, you are also free to choose a property that has a better layout than your current home. Your mobility in later years won’t be the same as it was and that requires some planning. Flights of stairs can become tricky to manage or you could need a wheelchair accessible layout.
In this case, you could choose a ground floor property with an open layout. It will make it easier for you to access and move around, as well as require less upkeep.
3. More Cash on Hand
If a lot of your equity is locked up in properties, this may mean that you have less cash on hand. Selling a large property and downsizing into a cheaper one means you can free up some of your equity and use it on something else.
Be it a vacation, paying off the mortgage, setting up funds for your grandchildren. You can choose any number of things to put your extra money in or simply use it to supplement your retirement income.
4. More Convenient Location
You may have enjoyed a bustling neighbourhood in your younger years. Back then, proximity to your place of work and easy access to transport were the most important aspects. However, as they retire, many find themselves longing for more peace and quiet. Or, longing to be closer to family and friends.
If you decide to downsize, this means that you could choose a neighbourhood that is more to your taste and more appropriate for your retirement interests.
Downsizing also means you could afford to change neighbourhoods and perhaps choose one that was out of your price range before. The price of a three to four-bedroom property in a generic neighbourhood could translate into that of a two-bedroom property in a coveted neighbourhood.
On the other hand, if you are living in a very isolated location, you may want to move closer to a town and gain more convenient access to services. Downsizing could take you closer to local amenities such as grocery stores, medical practices, leisure facilities.
Cons of Downsizing in Retirement
Overall, downsizing has a lot of pros. However, it may not be for everyone.
The cons of downsizing may include:
1. Leaving the Familiar Behind
Downsizing and leaving the neighbourhood or town you’ve lived in for most of your life is not easy. It could mean that you are leaving loved ones behind, leaving places you have grown to know and love, getting used to a new set of surroundings and people.
On the other hand, you could choose to downsize to a location you are familiar with, or where you have a lot of contacts or family already.
2. Adapting to a New Lifestyle
Leaving the familiar behind also means adapting to a new lifestyle. Whenever you change your place of residence, you will also have to build a new network of friends, learn where to find the necessary amenities and facilities, settle into a new community.
To some, this may be an exciting prospect. To others, however, it may be too daunting and not something they would like to do in their retirement. It’s up to you to weigh in the pros and cons of these lifestyle changes and decide what’s right for you.
It’s never too soon to start planning for your retirement and downsizing is a good way to adapt your living conditions to the needs and wants of older age. With its potential for cutting costs, lessening upkeep, and opening up new possibilities, downsizing is becoming an increasingly popular solution for older generations.
Our estate agents are very knowledgeable when it comes to assisting home buyers in finding the right property to downsize to and would be happy to support you in your search. Contact
them anytime at 0207 055 0441.