There are many ideal scenarios you might imagine when thinking about retirement: idyllic seafront days, sailing holidays, interesting travel plans and the luxury of time to spend with loved ones.
But at some point, where you intend to live when you retire will become a focal point. Will you stay in your current home or will you move to a smaller property? Would downsizing your home help with managing living space and prove more cost- and tax-efficient? Do you want to live in the same neighbourhood, and have you thought about potential long-term care needs?
Answering these questions comprehensively, along with figuring out your reason for downsizing, may take years of consideration - something to think about early on in your retirement planning journey.
Although it may prove tough to leave a place you’ve built fond memories in, downsizing to a smaller house could be a workable option for many retirees, because it allows you to
- Enjoy a more manageable pace of life in a home that’s easier to look after;
- Move closer to family and loved ones, or to an area you like;
- Find a less expensive property, thereby raising money that could be used to supplement your pension or pay off debts, while possibly reducing living costs (energy bills, council tax, maintenance and repair).
But it’s also important to weigh up factors that may not be immediately obvious
- Changes in health and mobility later in life that could impact your living arrangements – and the type of property you might choose.
- Loneliness caused by the passing of a partner or loved one you live with could affect how you feel about moving. If downsizing means moving away from your support system, how would you cope?
- If you currently live in a sizeable house with several rooms and a garden, downsizing to, say, a 2-bedforoom flat or a bungalow would mean less space for your hobbies, or for accommodating family and visitors. Would you be happy with this?
Downsizing your home and taking on a move during retirement is a big task but with the right planning it can turn into an enjoyable experience that could possibly improve your life quality in later life.
If you’re thinking of downsizing as an option at retirement, the sooner you make the decision, the better. A qualified financial adviser can discuss whether downsizing would be a suitable option for you based on your circumstances, and as part of your long-term retirement plan.