These days the term “downsizing” is used quite often by retirees. But what does it really mean and is it necessary for all retirees to downsize? We have outlined a few options for “downsizers” and how they can do it.
Make the decision
Why downsize? It’s not necessarily for everyone, and the reasons people choose to downsize are varied and personal. But generally downsizing coincides with retirement or retirement plans.
There are lifestyle reasons to downsize, like when the kids having left home and you find yourself with space you are no longer using, or you have a house that’s simply too big and takes too much effort to maintain. Perhaps you just want a change of scenery, or to fulfill a dream of a tree change or sea change, have a simpler life, or travel the world.
And there are also financial reasons – many downsizers want to free up some cash for retirement by buying something smaller and cheaper and investing or using the money elsewhere.
Some people are forced to downsize for health reasons, to be closer to family, or choose to move into accommodation with more living support available, like a retirement village.
The downsizing do’s
- Assess your needs, wants and desires, and work out what you really require in a new place
- Take your time
- De-clutter and sort through all your possessions, because downsizing means you can’t take everything – so recycle, reuse, donate or sell what you don’t need anymore
- Make a list of what you absolutely cannot live without – for both possessions and property
- Establish what kind of property will suit you best: A small house, villa, townhouse or apartment (be mindful of stairs), retirement village or something altogether different and out of the box?
- Make sure you carefully identify and plan your property essentials checklist in advance of buying anything, eg: aspect, size, features, living space, bedrooms, accessibility, location, etc.
- Compare room sizes and make sure you have plenty of storage – you can always rent a storage unit if you can’t part with everything at once
- Assess if you can afford to buy first then sell, or if it’s easier to sell then buy
- Do thorough research on the market before you sell or buy and seek professional advice from agents on maximising your sale price
- Choose your new location carefully and, if you’re uncertain, “try before you buy” by renting
- It’s a good idea to be close to relevant services, transportation and within reach of relevant support networks like family or friends
- Seek financial advice to maximise your nest egg and minimise transaction costs and taxes
The downsizing don’t’s
- Avoid making rushed or fast decisions – downsizing is a decision to be made carefully after much research and planning
- Don’t blow the cash you liquidate from the sale of a property – you’ll need it to sustain a long and happy retirement
- Don’t buy a property simply to fit your furniture unless it’s a prized possession – it’s usually cheaper to buy new furniture than to buy a home around furniture
- Don’t buy a property if you feel pushed, rushed, or uncertain – you may regret it
- If you can’t do it all yourself call in the professionals – movers, friends, or family to help
Remember that the process of downsizing after many years in a property can be traumatic – look after yourself emotionally and prepare for a period of adjustment in your new home.