At some point before or during retirement, most people will start seriously thinking about when they should downsize their home. In reality, this can be a very complex question and the solution is not a one-size-fits-all answer. Financial needs and lifestyle choices differ between people and this often plays a huge role when deciding where to live. From a financial perspective, I usually encourage people to put together a retirement cashflow plan to determine if and how long their investable assets and pension income will be able to support their retirement needs. In some cases, this process highlights a period of time when tapping into the built-up equity within their home is essential. In other cases, financial projections provide peace of mind that the retiree will not need to sell their home in order to afford retirement indefinitely. Determining if they have the luxury to make a lifestyle choice, instead being forced into a difficult financial decision later in life, is important to most people.
That said, it is worth noting that simplifying your living situation as you age is worth a lot more than just money. Making the decision early in retirement, while hopefully still in good health, will likely result in less maintenance and costs in the long run. Most importantly, you will still have control over where you live and what you bring with you, in addition to preventing this burden from falling upon your loved ones. While the decision to move can be overwhelming in the beginning, doing nothing at all will likely ensure that the decision in the end will not be yours. Do not let circumstances outside of your control dictate where you live for the rest of your life.
Maria Dawes, Portfolio Manager
Capstone Private Wealth