The Kid’s Moved – Is It Time to Downsize?

There comes a time in most family’s lives when the kids are grown and hopefully, by then, the middle-aged “basement dwellers” have moved out. I say that with a smile, and a smile because if you have children, no matter how big of a headache they may have given you over the years, they will always be your babies.

It’s in your nature as a parent to always continue to provide and be there for your children no matter what. But when they’ve moved out, do you really need that 6 bedroom, 4.5 bathroom and 10,000 square foot home? Could the time come when you and your spouse just don’t need or want that size of a house anymore? In addition to the mass amount of space you have, now that the kids are gone, who’s going to do all that cleaning?

When in retirement or preparing to retire there are several factors to take into consideration when thinking about making your next move. Do you rent? Do you buy? Downsize? What are the best options for you and your family? Here are some things to think about when contemplating the question of renting or buying.

Reasons to Buy
• It’s an Investment: When you buy versus renting, your money is in fact being invested with hopes that the stock market will continue to rise. You’re increasing your degree of ownership so when that day comes to sell your home that you’ve put endless hours of elbow grease into, you receive a great return on investment (ROI).

• Taxes Taxes Taxes: Sorry but you’ll never be free of paying taxes completely, but when you own a house you can deduct mortgage interest as well as your property taxes. Uncle Sam doesn’t give this break to renters.

Reasons to Rent
• Got Commitment Issues?: When you rent versus buy you don’t have to be committed. Sure you may have to sign a lease for 6 months to 1 year, but if you’ve got commitment issues, renting is the route for you. You won’t be tied down and you can move to another place without all the hassle of buying a home or condo.

• Put Your Hammers Away: You may have to change a lightbulb or two but that’s about it. When a pipe starts leaking or your air conditioner stops working all you have to do is call the landlord now. Not your problem anymore!

Downsizing
• Less is More: A smaller home means less space, but it also means less time, stress and money spent on upkeep. Think about all that extra time you’ll have to do the things you want to.

• The Moolah: Is it the right time for you to downsize? There really isn’t a one answer for everyone. Your situation may be different from the next person’s but if you have the opportunity to downsize and you’re not attached to your home, you could potentially reduce your mortgage by hundreds of dollars a month and put that cash toward other financial goals such as retirement or getting rid of any debt you may have lingering.

As we talked about earlier, everyone’s situation is different and timing is everything. You may be teeter-tottering on the topic and whether it’s right for you and your family. Your financial situation is of utmost importance. If you’re looking to make a move, let’s get together and review your financial plan and make sure you’re fully prepared so when you do decide to make the move, you have a greater peace of mind.