Retirement age is an age that comes for us all, whether we are prepared or not. Retirement can be a glorious time if planned for properly, but can also pose unique logistical challenges – not in the least, in the form of your home.
You may be rightfully concerned about your retirement savings, and thinking about downsizing to create more income. What should you consider before you follow through on such a move?
Buying and Selling
Firstly, it is important to remember that the act of downsizing is not as straightforward as simply moving to a smaller, accessible home at your own convenience. Downsizing is a multi-step event that necessarily requires engagement with the property market – which can, itself, be a stress-inducing and drawn-out endeavour.
The initial point of your downsizing may be to create additional income for your retirement, but the various costs associated with the sale of your home and the purchase of another can cut into your profits considerably. Stamp duty and solicitor’s fees can mount quickly, and this is to say nothing of the various costs associated with the act of moving itself.
If your only goal was money, you may be better served taking out an equity release mortgage. These are available to those over the age of 55 and can allow you to enjoy the value of your property without having to relinquish it. In this way, you save money on moving costs and do not have to uproot yourself for retirement money.
Essential Space
Downsizing may seem a wise move in theory and can be easy to envision as a positive move for your household. However, downsizing can be much more problematic in practice – especially if you have not made serious considerations for later life.
For one, there will be a great deal of belongings to which you are sentimentally attached, for which you may not have room in your next home. For another, you will need adequate space for comfort and the indulgence of your hobbies, which your downsizing budget may not allow for. Lastly, you may need to leave space for the installation of mobility aids around the home; will your new, smaller home be as suitable for this as your existing one?
The Memories
Lastly, there is the simple fact that your existing home will mean a great deal to you – whether you realise it or not. It may have been your family’s home at one point, and you may have a lifetime’s worth of happy memories from within its walls.
In cases such as these, the benefits of moving out can often be outweighed by the sheer emotional capital of your current house. Your retirement should be a happy and comfortable one, and these feelings should not be discounted for the sake of a smaller home.