Just like you dilute your life’s savings for a dream home when you are young, similarly, nearing retirement age calls for corrective measures that help you save costs and reduce your financial burden in old age. There are several challenges that you will encounter in the process. Experts recommend that downsizing your home is the most viable solution before you hit retirement. With your kids settled and your needs limited to two people, you can save costs on house maintenance as well as get rid of extra furniture and furnishings to ease the pressure.
Fundamentally, the term ‘downsizing’ implies shifting from a bigger accommodation facility to a smaller dwelling. This could further mean a lower maintenance cost, reduced property taxes, additional monetary benefits, no debts and mental satisfaction.
Fixed deposits and insurances policies are also some of the good alternatives. However, when it comes to your property, if you are unlikely to use a bigger space then downsizing is the best thing to plan. So, if you are a retiree or a pre-retiree, there are several advantages of downsizing that you should know. 99acres shares expert insight on downsizing and how it is a helpful measure post retirement.
Low maintenance cost
The basic retirement planning should be to focus on the idea of cost cutting as the lesser you spend on your living, the lesser you need for your retirement. In this context, your house is a controlling expense. The higher is the cost of your house, the higher will be your expenses.
The cost of living in a big house is always higher than the cost of a small house. For instance, it’s not only the property tax, insurance and maintenance cost that impacts your savings but also the type of furniture you put in the house, the car you drive and the way you socialise that is likely to influence the overall maintenance cost. So, the lower the value of the house, the lower will be the expenses incurred.
Most of the home-owners would agree that big homes require a lot of time and energy. From indoor repairs to outdoor upkeep, it is not only a challenge but also a stressful activity. However, downsizing your home can be a first step towards reducing your stress and having a streamlined life.
Small homes require less time and attention for completing daily chores, allowing you enough time to spend with your partner or socialise with friends or pursue your passion like gardening, music painting that you could not take up earlier while you were occupied in a full-time job.
Additional retirement capital
Downsizing helps you save big for your unemployed days. Even if you deduct the cost of shifting to a new place and the fees of a professional real estate agent, you still save an enormous amount to support your retirement. According to Rohan Agarwal, Managing Director,
According to Rohan Agarwal, Managing Director, Geopreneur Group, “Selling of a house is a slow process and if the couple is undergoing a financial crunch, it is essential that they don’t sell the property at an undervalued cost. It is recommended that the couple is cautious and dealing with credible sources after proper background checks as this could be their life’s assets that they are putting in the market. Another challenge is to find a buyer for the existing house and buy a new house. Although, one can accomplish a good deal by associating with brokers in place but ascertain that you contact to professional agents.”
Pursue travelling plans
One of the most common desires that majority of the retirees have is to travel different places. So, if you have plans to spend less time back home then it is useless paying more for a place where you are unlikely to stay much. Besides, as bigger houses have high maintenance cost, it might impede your travelling plans. Thus, downsizing is a decent idea as the extra amount realised from the sale of the house can be utilised to sponsor your trips and lodging facilities.
Downsizing helps you keep a control your expenses. A small home prevents the home-owner from splurging less on the electricity bill, an extensive garden and home décor. It helps the owner to manage their financial condition without over-burdening with additional debt