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Many retired Baby Boomers choose to move closer to their adult children. In fact, this group is the most likely to move the farthest after selling their home. The trend to live near family began prior to the pandemic, according to the National Association of Realtors®, and has continued unabated. Retirees aren’t the only ones free from career ties to a specific location. Since the beginning of the global pandemic, more employees have been working remotely from home. Among the many benefits, this allows people to live wherever they want.
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Your housing costs leave no room for savings
With travel back to pre-pandemic levels, life is active again and boomers will be returning to those pre-pandemic plans that were sidelined for the last few years. People will be looking for a simpler home arrangement allowing for travel, hobbies and volunteering. With a more balanced housing market expected, with inflation stabilizing and with interest rate increases slowing, Transitions Realty believes 2023 will be the year of the downsizer. For the last two newsletters of the year, I asked people in the investing, financial planning and real estate worlds to send me a summary of a trend or theme they think will be big in 2023. Here’s the first batch of responses, which have been edited for length and clarity.
In tandem with planning out a room, count the number of closets and cabinets you'll have in your new residence. Compare it to what you have now and start making determinations on what's going to have to go. We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. Shedding some square footage could be a smart move for one big reason.
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It can also be much harder later in life due to health issues or mobility restrictions. In-home care services are also offered at various levels depending on the situation. In-home caregivers can provide help with day-to-day activities like cooking, grooming, or shopping, while also making sure you’re safe. I moved after a few years to a new development, a 63 story building with indoor pool, gym, community garden, and parking, now having purchased a car, a MINI. My current one bedroom condominium is 1,245 sf/115 sm with in unit laundry, master bath, and powder room.
Do your research and carefully weigh up all the pros and cons, and don’t forget to include the rest of the family in the conversation too. Downsizing done right can have many advantages and opportunities that make your life easier. If your home is gaining value rapidly, it might be wise to wait the market out before buying a smaller house. Under these circumstances, it often makes sense to hold off until the price climb levels out, and then to sell your home when it’s worth more. Furthermore, downsizing your home could help you save a lot of money on housing. These days, property taxes are up as a result of higher home values.
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While we have enjoyed the benefits of massive decluttering since we moved, and being around each other a little more, a bigger house is needed of us. Hard to homeschool in a smaller house without taking over the kitchen and that ends up a chronic mess. Hard to have quality time with your spouse when the family room and kitchen are only 15 feet from the kids rooms . On principle, I agree with purchasing a home you can afford.
A general rule of thumb is to spend around 30% of your monthly budget on housing expenses. This includes your mortgage payment, utilities, maintenance costs, homeowners insurance, and property taxes. In fact, any household that spends above 30% is considered financially burdened.
One of my taglines is I help people RE-dream their real estate needs. Not all baby boomers want to downsize, but many do and that is their choice. The code of ethics says an agent should be a fiduciary, so they should be and most do advocate for their clients best interest.
If you are not ready to let go of a sizeable chunk of your possessions, perhaps it’s not the right time for you to move house just yet. This may sound like a simple proposition in theory, but if you’ve lived somewhere for decades, with all the paraphernalia of family life around you, it could be easier said than done. You may be shocked by the amount of ‘stuff’ that’s accumulated over the years. But it’s not just the sheer scale of the job and the time it takes – it’s an emotional process too. Once you’ve shortlisted your favoured locations, you need to consider the type of property that would be most appropriate for your future needs. Are you simply looking for a smaller house with a garden?
If you’re still relatively independent or can get the level of help you need, perhaps meal delivery, cleaning services, or with the help of an in-home caregiver, staying at home can be a good option. Our homes are filled with precious memories that we hold dear. The wall where you recorded your grandchildren’s heights, to the living room where your daughter first learned the piano. Our homes are reminders of the love and laughter we’ve shared with friends and family, and this leads many to remain in their homes longer than is wise for their health and financial stability. Then why is it so, so common for buyers to complain about their realtors driving them around, showing them houses “just a bit” higher than their preferred price range?
If this sounds familiar, then it’s one of the best times to start thinking about downsizing. Unless you want to keep a book for sentimental reasons or like to re-read one, moving a bunch of books is a pain. Eliminate some of them by selling them at a Half Price Books or online.
Maybe your housing costsdon'texceed 30 percent of your pay, and your maintenance costs are minimal. But be that as it may, if you find that you're not saving money month after month, and housing constitutes your greatest monthly expense , then you may need to work on trimming that figure. If you’ve gained mobility restrictions as you’ve grown older, you probably made home improvements and modifications for safe and comfortable living.
If you feel that your home is becoming harder to manage, it might be time to consider downsizing. Moving to a smaller property for financial, health, practical or emotional reasons can be a big idea to get your head around. While it might offer the perfect answer to many empty nesters’ troubles, it’s not the right solution for everyone. An empty garage, outbuilding or loft space could also be turned into an extra income stream. Check out apps such as StoreMates who connect homeowners who have spare storage space with people who need it. According to recent figures, potential downsizers make up nearly a quarter of all households aged 55+, which equates to around 2.9 million homes, which is a slight downturn from 3 years ago.
The definition of retirement has changed drastically over the years. Now more than ever before, retirees are maintaining an active lifestyle that includes hobbies, exercise, and continued learning – and these all cost a bit of money. Perhaps it’s joining a gym, taking painting classes, or taking a few college courses. If your monthly housing expenses are so high that you can't enjoy your hobbies or activities, now may be the perfect time to downsize to free up some cash so you can spend it the way you want. If your monthly housing expenses are so high that you can’t enjoy your hobbies or activities, now may be the perfect time to downsize to free up some cash so you can spend it the way you want. My wife and I live in a 1440 sf house, and are quite happy with it.
For someone who dedicated much of their life to music, find a local school for musical equipment and instrument donation. The impact of the loss of the items will decrease if they are going somewhere where they’ll be appreciated. Photos are keepsakes but unless you're regularly thumbing through books of them, there's not much reason to keep a physical copy of them. Save yourself some additional moving items by digitizing those photos. Do the same with any movies or CDs you've got sitting around collecting dust. For any remaining CDs or DVDs,make a wall cabinet to save on space and put those old CD bins to use as a twine dispenser.
