Many retirees decide to downsize during retirement, some have larger homes and multiple vehicles that are no longer practical or necessary, some would like to relocate to an area that is more suitable for them.
Whatever the reason, it may be possible to lower your monthly expenses by downsizing.
Selling Your Home
Although the current housing market is volatile, you may still be able to save money by selling your home and moving to something smaller. How much equity you have in your home might be the deciding factor for you. You may be in a position in which selling your home leaves you with enough money to put towards a substantial down payment on a smaller home which may reduce your monthly mortgage payment.
If you have already paid off your mortgage you can purchase a new home outright and depending on the price end up with money left over.
There are numerous ways you might save money when moving into a smaller home.
Lower Utility Payments
Smaller homes often have lower utility bills since there is less space to heat and cool and smaller homes in general use less electricity. The appliances in your new home may also be more energy efficient and if the home is newer or has been updated with windows, doors and insulation that can also lower your utility bills.
Minimizing
Most people purge the clutter when moving from a large home into a smaller home. You can sell unwanted furniture, appliances and other items you have and make some extra money. And moving forward you will be less inclined to purchase new things because you will have less space.
Lawn Care & Outdoor Maintenance
A smaller home may also mean less property to maintain and care for. You can save on landscaping services and other outdoor maintenance costs.
Reduced Homeowners Insurance Rates
The size of your home can determine your homeowner’s insurance rates. Smaller homes and fewer outbuildings typically cost less to insure.
Location also impacts rates, some areas are less expensive than others, you can take this into consideration when deciding where to live.
You may also be able to take advantage of insurance reductions in your new home, for example the new home may be more energy efficient, have better security, or have other features that would qualify you for insurance discounts.
Reduced Property Taxes
The two main factors that determine the amount you pay in property taxes are the home’s value and location. If you move to a smaller home with less square footage and acreage you may pay less. And moving gives you a chance to research the area and possibly choose a location with a lower tax rate.
Pay Off Debt
Since your overall cost of living will be reduced you will have more available cash to put toward paying down any outstanding debt.
More Money to Put into Saving & Investing
You can put the money you would have been spending on higher utility bills and other expenses into your savings or investment accounts.
Reduced Stress
Having fewer possessions to care for, a smaller home and property to maintain, reduced debt, more available cash on hand can all reduce stress.
Having less to worry about can bring a great sense of relief and peace. Moving gives us a chance to purge and organize.
More Activities You Enjoy
When choosing a new location, you have the opportunity to select a home that is in an area with more to offer. You might select an area that is closer to parks, pools, fishing, hiking, community events, bird watching, camping, golfing, shopping, dining, theaters, community and senior centers, libraries, museums, zoos and other places that you can enjoy.
Fewer & Smaller Vehicles
Reducing the number of vehicles you own or trading a larger vehicle for something smaller can save on insurance, gas and maintenance costs.
If your new home is closer to shopping, medical care facilities, and other amenities you will have less travel time and lower fuel costs. Most insurance companies will offer discounts if your travel time is reduced. If you move to an area where public transportation is easily accessible, or you are within walking or biking distance to town you may be able to use those options and sell your car.
Aging in Place
Several surveys, including a survey by AARP estimates that 3 out of 4 adults age 50 and older want to remain in their own homes after they retire.
Moving during retirement gives you the opportunity to select a home that will better suit your needs as you age. A home that is safe with features that make life easier for older adults.
The Tech Minimalist 