Right-Sizing Your Life: Exploring the Advantages of Downsizing in Retirement

As you assess your expenses in retirement, finding ways to save money becomes increasingly appealing. One traditional and widely embraced method is downsizing to a smaller home.

Typically, when contemplating expense reduction, one might consider everyday purchases such as groceries and other consumables. However, downsizing your residence often results in a reduction of associated bills, including mortgage payments, energy expenses, and maintenance requirements. Realtor.com elaborates on this aspect:

"A smaller home typically means lower bills and less upkeep. Then there’s the potential windfall that comes from selling your larger home and buying something smaller.”

That windfall is thanks to your home equity. If you’ve been in your house for a while, odds are you’ve built up a considerable amount of equity. And that equity is something you can use to help you buy a home that better fits your needs today. Daniel Hunt, CFA at Morgan Stanleyexplains:

Home equity can be a significant source of wealth for retirees, often representing a large portion of their net worth. . . . Retirement planning can be complex, but your home equity shouldn't be overlooked.”

And when you’re ready to use that equity to fuel your next move, your real estate agent will be your guide through every step of the process. That includes setting the right price for your current house when you sell, finding the home that best fits your evolving needs, and understanding what you can afford at today’s mortgage rate.

What This Means for You

If you’re thinking about downsizing, ask yourself these questions:

  • Do the original reasons I bought my current house still stand, or have my needs changed since then?
  • Do I really need and want the space I have right now, or could somewhere smaller be a better fit?
  • What are my housing expenses right now, and how much do I want to try to save by downsizing?

Then, meet with a real estate agent to get an answer to this one: What are my options in the market right now? A local real estate agent can walk you through how much equity you have in your house and how it positions you to win when you downsize.

Bottom Line

Want to save money in retirement? Consider downsizing – it could really help you out. When you’re ready, let’s connect about your goals in the housing market this year.

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317 Palmaria Ct Nokomis,  FL 34275
$569,000
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3
Beds
2
Baths
1,757
Sq.Ft.
2022
Year Built
2
Days on Site
A4617266
MLS
Open 7/21
613 Mistiflower CIRCLE Nokomis,  FL 34275
$995,000
Neighborhood: Venice Woodlands Ph 1
4
Beds
3
Baths
2,594
Sq.Ft.
2021
Year Built
2
Days on Site
N6133788
MLS
$419,000
Neighborhood: Sorrento Inlet Ph 5
3
Beds
2F11/2
Baths
1,721
Sq.Ft.
1982
Year Built
2
Days on Site
A4617754
MLS
$389,000
Neighborhood: Nokomis
2
Beds
2
Baths
1,354
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1953
Year Built
2
Days on Site
A4617753
MLS
$3,880,000
Neighborhood: Sorrento South
4
Beds
3F11/2
Baths
4,543
Sq.Ft.
1968
Year Built
2
Days on Site
A4584688
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$680,000
Neighborhood: Cielo
3
Beds
2
Baths
2,028
Sq.Ft.
2021
Year Built
3
Days on Site
A4617421
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Open 7/20
5588 Cantucci St Nokomis,  FL 34275
$799,000
Neighborhood: Bellacina By Casey Key
3
Beds
3
Baths
2,346
Sq.Ft.
2016
Year Built
3
Days on Site
N6133866
MLS
$975,000
Neighborhood: Nokomis
4
Beds
4
Baths
2,950
Sq.Ft.
1956
Year Built
4
Days on Site
O6224243
MLS
$114,900
Neighborhood: Nokomis Manor Natures Park
3
Beds
2
Baths
1,488
Sq.Ft.
1965
Year Built
4
Days on Site
O6224361
MLS
Open 7/21
135 Shady Pine Ln Nokomis,  FL 34275
$435,000
Neighborhood: Laurel Pines
3
Beds
2
Baths
1,442
Sq.Ft.
1986
Year Built
4
Days on Site
A4617443
MLS
$603,084
Neighborhood: Vistera Of Venice
3
Beds
2
Baths
2,131
Sq.Ft.
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Year Built
4
Days on Site
T3542337
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$700,000
Neighborhood: Vicenza Ph 1
3
Beds
2F11/2
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2,237
Sq.Ft.
2020
Year Built
4
Days on Site
N6133826
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