Experts Advise Seniors to Downsize Homes for Better Retirement

Experts Mike Thorne and Effy Terry advise seniors to downsize their homes for a better retirement, citing benefits like reduced expenses and increased leisure time. Downsizing involves selling a larger home and buying a smaller one, allowing seniors to unlock equity and fund their retirement lifestyle.

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Experts Advise Seniors to Downsize Homes for Better Retirement

Experts Advise Seniors to Downsize Homes for Better Retirement

As more seniors prioritize aging in place, experts Mike Thorne and Effy Terry are advising a different approach: downsizing homes for a better retirement. While many adults over 50 prefer to live at home as long as possible, even investing in costly renovations to accommodate potential mobility limitations, Thorne and Terry argue that downsizing can offer numerous benefits.

Why this matters: The decision to downsize or age in place has significant implications for seniors' financial security and quality of life, affecting their ability to fund their retirement and maintain independence. As the global population ages, the choices made by seniors today will shape the future of retirement living and healthcare.

Downsizing involves selling a larger home and purchasing a smaller one, such as a townhome, condo, or bungalow. In Canada, common reasons for downsizing include paying off a mortgage or debt, reducing monthly bills, being closer to family, reducing housework and maintenance, freeing up extra money for retirement, and providing peace of mind for snowbirds.

The benefits of downsizing, according to Thorne and Terry, are both practical and financial. Seniors can reduce the burden of housework, yardwork, and home maintenance while also being closer to loved ones. Financially, downsizing can allow seniors to pay off debt, reduce monthly expenses, and free up extra money to fund their retirement lifestyle.

However, the experts acknowledge that downsizing is not without its challenges. The process involves costs for fixing up the home, staging, and potentially unexpected expenses. Seniors may face emotional hurdles in decluttering and parting with possessions. Managing the sale of the home, cleaning, sorting, packing, and moving can also be daunting. Family dynamics and lifestyle changes must also be considered.

To determine if downsizing is the right choice, Thorne and Terry suggest seniors ask themselves key questions: Do they have substantial equity in their home? Do they want to buy a vacation property? Do they need or use all the space in their current home? Could they use the extra money for daily expenses or their desired retirement lifestyle? How tied are they to their current neighborhood? Answers to these questions can guide the decision-making process.

While many seniors are opting to age in place, even investing substantial sums in home renovations like 70-year-old Brenda Edwards' $115,000 project to retrofit her California home, Thorne and Terry maintain that downsizing offers a compelling alternative. By reducing expenses, increasing leisure time, and unlocking equity, downsizing can pave the way for a more comfortable and fulfilling retirement, making it an option well worth considering for seniors.