At that point, many families found themselves living in small condominiums with adult children and college students returning home for quarantine. Everyone thought it would be for a week or two, at most. Now, almost a year later, some families are looking to re-upsize, either by buying a new, bigger home, by installing an accessory dwelling unit (ADU) in the backyard, or by renting an additional apartment in order to provide better options and a little more elbow room for their families.
Once COVID is in the past, these homeowners will have to decide whether they want to re-downsize or if more room makes more sense. Meanwhile, Gen-X homeowners are thinking ahead and wondering whether downsizing really works for the active retirement they’re envisioning.
What should you consider before downsizing? How do you know whether downsizing is a viable option for you and your family? Here are some questions to consider.
If you and your spouse think of yourselves as the head of your extended family, how would downsizing affect your holidays? Do you want enough space for everyone to come home for a family feast or will you be just as happy celebrating with your adult children in their home? Can you see yourself renting a larger vacation home over the holidays if you need more room, or do you want everyone gathered around the hearth at their childhood home?
If you still have children in college, are they expecting to come back home for a few months after graduation? Do you have adult children who are single and who may need a soft place to land in the event of a job loss or financial reversal? Do you have elderly parents or other family members who may be expecting to live with you when they can no longer remain in their home? The unexpected has a funny way of happening, so having a little extra room may make all the difference.
You may be envisioning a fun-filled retirement in a resort-style community where temperatures are warm and the sun shines all year long. However, if your retirement community restricts visits by those under 55, you may find that your children and grandchildren can’t visit as often or as long as you would like. Worse, you may find that you don’t have room for the grandkids to stay over without throwing your downsized home into chaos.
If part of your retirement plan involves frequent travel, you may be able to get away with a smaller home in retirement. After all, if you’re not planning to spend much time there, the lack of space may not be a problem. However, as you slow down with age, or if mobility becomes an issue, you may be spending more time inside and wishing for a little more space. When deciding whether to downsize, think both short-term and long-term for maximum satisfaction.
Gone are the days of sitting in a rocking chair and watching the world go by in retirement. Today’s active adults are often starting second careers, returning to school, heading up volunteer organizations, or starting home-based businesses. You and your spouse may both need a home office or hobby space and you may be collaborating with employees and colleagues, requiring additional room.
During your working years, you may not have always had time for dinner parties, cookouts, and other opportunities for entertaining. Now, however, you may be thinking about refining your cooking skills, hiring a caterer, or crafting a signature cocktail. If entertaining friends and family is on the menu, make sure you’ve got spaces that are both fun and functional.
If you tapped into the equity in your home to downsize, and then spent the rest of your closing funds paying down debt and buying a new RV, you may not be in a position to go back to a larger home. In addition, if your income is reduced after retirement, you may not have the funds to maintain a larger property with the accompanying larger utility and tax bills. Talk to your financial advisor and find out how a return to a larger property may, or may not, make sense for you.
If you’re committed to downsizing your space, it’s important for you to downsize your possessions as well. You’ll find yourself frustrated if every closet and cabinet is packed to the brim from day one. Rather than putting it off, go ahead and do a thorough decluttering and clean-out. Give items away to your kids, list items online, and donate to charity to free up space in your smaller home.
Not sure whether downsizing is right for you? Considering upsizing after a frustrating and unsuccessful downsizing experience? Wondering what options are available in your favorite community? Talk to a trusted real estate agent who can help you crunch the numbers, look at listings, and make a more informed decision.
CREDIT: American Lifestyle
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