Retirement can be an exciting time of transition and reflection, but it is also a time when many long-term decisions and full financial services need to be considered, including the size and type of your retirement home. For many, the term “downsizing” comes to mind when thinking about the home you want to retire in. However, that term can be misleading and not always accurate. Think of it more as right-sizing – finding the type of home that meets your needs in retirement, just as your current home was chosen to meet your needs during your working years. (For example, if the kids are gone, do you really still need to take care of a five-bedroom home?)
Just like no two people’s retirement plans are the same, neither are their housing needs. Here are 5 factors to consider when finding your right-size home in retirement.
Arguably, the most important factor to consider when searching for a home is your budget. And never is that truer than when looking for your retirement home. While you’ve worked hard to save and plan for your retirement wisely, it’s still important to consider the overall costs compared to your monthly budget.
A helpful tip is to make a list of desirable characteristics for a new home and prioritize that list into “must have” and “would be nice” categories so that you can keep your focus on the big picture. No one wants to live their retirement years strapped for cash.
Another tip is to consider the additional costs, including utilities, homeowner’s association dues and other costs that are often overlooked when initially considering how much home you can afford. These costs can add up and make what seemed like an affordable decision to begin with a budget buster.
Need help budgeting? PAX Financial Group can help. A full financial services firm, we can help you with all your financial needs, from budgeting to investment management. Contact us and get on the right track to retirement.
2. Size and Upkeep
Remember what you want in retirement – did you hope to relax and spend time with the people you care about or travel around the world visiting new places? This plan should be considered when shopping for a new home. While you may have had a larger home in the past, chances are you had to put in a lot of hard work to keep everything running smoothly. Or perhaps you had help from your children or simply had more energy to maintain a larger home. When looking for your right-size retirement home, consider how much space you really need and how much time you want to spend cleaning and working around the house. You may be surprised to learn that once you have de-cluttered and narrowed down your belongings to what you really need to live comfortably, you can live in a much smaller space with less upkeep required.
Age is another factor that can affect the amount of upkeep required to maintain your home. While an older home may be rich in charm, it may also be built on an older infrastructure that could cause major problems down the road. On the flip side, some newer homes may also come with maintenance issues as well, so it pays to do your research and investigate the home builder/maintenance history of any retirement home you consider.
3. Entertaining and Lifestyle
Has your home always been the central place for parties and gatherings? If so, that’s not likely to change in retirement. Choosing a home that fits your entertaining lifestyle is important, so perhaps you prefer a larger dining and living space but are willing to compromise on the size/number of bedrooms. Or maybe you don’t host large gatherings but you are an avid baker and require your kitchen to have all the bells and whistles. Whatever your lifestyle and entertainment needs, you should take them into consideration when right-sizing your home.
If you are more into neighborhood amenities and community gatherings, you may consider living in a retirement community. These often have amenities such as pools, tennis courts, health clubs and more that can help you live the retirement you’ve always imagined and worked hard for.
4. Space for Belongings
Once again, it’s crucial not to confuse right-sizing with downsizing.
To many retirees, the word “downsizing” has a negative association and evokes feelings of dread and sadness. Downsizing implies getting rid of all of your prized possessions in the interest of space. Right-sizing, however, is simply the idea that you don’t need all of the things you have in your current home to make you comfortable in a new home. Chances are, your retirement home will be smaller than your current home. To prepare for the change in size, it helps to think of what space you need for the things you can’t live without. Go through a de-cluttering process and see what is left.
A helpful tip is to start this process well in advance of searching for your retirement home, so you have time to really consider what you can’t live without and have a good idea of what size house your belongings require. If you get stuck on the de-cluttering process, you may want to bring in an outsider’s perspective, specifically someone who’s been there. Reach out to friends who have successfully right-sized their home and ask them for some guidance on how they were able to pare down their belongings. You may be surprised how much you can part with, without missing anything.
5. Think Long-Term
Right-sizing your home doesn’t just mean considering space for belongings, but also the layout in terms of mobility. If you or a loved one require the assistance of a cane, walker, wheelchair or another mobility-assisting device, the layout of your home can have a huge impact on how easily you will be able to navigate your home down the road. For example, a home with the master bedroom upstairs may not be the best idea looking further in the future. Also, if a family member or nursing aid needs to stay long-term to assist someone in the home after perhaps surgery or an illness, the home should have adequate space for guests.
Considering not just your current home needs but also your future lifestyle needs can help make difficult transitions much easier to handle. Just as you need full financial services before and in retirement, it’s important to consider your full lifestyle when choosing a new home after you PIVOT out of your working years.
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