by Andrew Petty

If you are nearing or in retirement, you may be reconsidering your housing needs. Does your current home feel like it’s too big for your needs? Will multi-level living be challenging later in life? Do you look at your current home as a source of retirement cash if you can sell it and move into something smaller?

Downsizing is a logical consideration, but it is not a decision to be taken lightly. There are a variety of factors you need to consider before you lock into your decision.

Weigh the benefits against the downsides

Depending on the size of your existing home, shifting to a smaller living space is an adjustment. You still want sufficient room to comfortably conduct your everyday life. This can include entertaining guests and hosting overnight visitors in your house (such as adult children and grandchildren). You also want adequate storage and space for your kitchen, home office or workshop.

Longer-term considerations include issues like reducing or eliminating the need to climb stairs to get around your home or making it wheelchair-accessible. Limiting outdoor maintenance requirements may be another factor. Think about your priorities, and how a different-sized home would meet those needs compared to your current accommodations.

The financial side

Many believe they will be able to bank a large amount of money from selling their existing large home by moving to a smaller, presumably less expensive one. It may not always work out the way you think.

Depending on where you live, you may find that the market for larger homes is not as strong as you’d expect. At the same time, with many baby boomers considering the benefits of downsizing, the demand for smaller homes is high, and those homes may be more costly than you think.

As you weigh your options, you may want to ask a real estate agent to help you not only in your search for a new home, but for a market analysis that will help you determine the value of your existing property.

Other financial considerations include potential taxes if you generate a large gain on the sale of your existing home. Check with your tax advisor to find out more. Closing costs are an added expense that will come into play in your transactions.

Planning is important

Your living space is a core aspect of your life and becomes even more important in retirement since you may be spending more time there. Determining the right type of home and the appropriate location is not a decision to be taken lightly. Most important is to make a choice that suits your lifestyle and your retirement goals. The financial implications are an additional factor. Talk to your financial advisor about how your home plans fit into your overall retirement plan.


Andrew R. Petty, CRPC®, APMA®, CLTC®, is a Private Wealth Advisor with Nona Wealth Advisors, a private wealth advisory practice of Ameriprise Financial Services, LLC. He offers fee-based financial planning and asset management strategies and has been in practice for 19 years. To contact him, please call 407-249-4006, visit his website at or stopover at his office at 10917 Dylan Loren Circle, Suite A, Orlando, FL 32825.

Investment advisory products and services are made available through Ameriprise Financial Services, LLC, a registered investment adviser.

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