You finally see your kids all grown up and taking life into their own hands. You look at what used to be their rooms; once a bustling part of the house, now all empty and wasted space. For you, it doesn’t seem to make sense to hang onto wasted space any longer. Therefore, you think of “downsizing” your home.
Downsizing doesn’t necessarily refer to physically shrinking your home via costly renovations. The usual method is selling the big house and moving to a smaller home by retirement.
However, downsizing is a relatively common issue in estate planning, especially if you plan to move to a bungalow in a prime market. For some, downsizing makes them walk away with an extra wad of cash; others, however, end up spending more. For Tom Lauricella of The Wall Street Journal, it’s not a matter of “if” but “when.”
To put it simply, if you want to downsize, downsize now. Aging can take its toll on your ability to move to a new home, namely making the long trip from DC to a quaint shore town in Maryland. The more you age, the less control you maintain over aspects of your life. That’s why a financial advisor in Maryland recommends downsizing while you’re still young and kicking.
Keep in mind, however, the costs associated with buying a new, smaller home, not just the cost of moving. You may have extra from the purchase, but you will still have to pay other expenses like the agent’s commission, legal fees, and land transfer taxes. The difference between the selling price of the old home and the buying price of the new home can determine this financial ability.
It’s wise to consult a DC financial advisor like Financial Brokerage Services before making any significant investment. It’s even wiser to do it while you’re still up and able.
(Article image and excerpt from “When Should Retirees Downsize Homes?” The Wall Street Journal, January 25,2014)