The Upside of Downsizing Your Mortgage

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If you own a home and your kids are fully launched, I hope you will give serious thought to downsizing to a smaller home. It can be a great way to plug a hole in your retirement savings plan.??

A recent report from?StorageCafe?looked at the potential savings in the 20 largest metro areas?if someone downsized from a 4-bedroom home to a 2-bedroom home. The average savings over a 10-year period was nearly $200,000. That can do wonders for any retirement plan.?

The report?factored in the average price for the different sized homes, the cost of buying and selling both homes, and the property tax differential. If you add in the likely savings from lower utility bills your savings could be even more.??

Now I know some of you may be thinking there’s no way you could move from the home where you raised your kids. I understand what a profound emotional tug that can be. I will not minimize it one bit.??

But I will ask you to at least open your mind to the possibility and think of what can be gained.??

If you have any worries about your retirement income, this can be such a smart move. You not only will likely pocket a profit on the move that you can invest, but the money you save from lower property tax is extra cash flow you have every year to add to your IRA savings.?

For those of you that live in multi-story homes, I also am going to ask you to think of your?85-year-old?self. Are there stairs to climb into the home, and then more stairs to get to your bedroom? As you age that can become hard to navigate. A move to a home that is more friendly for an older you?is?so smart.??

Now I know the grandparents out there and the grandparents-to-be are thinking they just can’t move to a smaller place. Where will the kids and grandkids stay when they visit? I?have to?tell you, holding on to a big home for a few family get-togethers each year doesn’t make sense. Everyone can still gather at your smaller place for the holidays, but they will stay in a hotel or an Airbnb. With all the money you’ve saved, you can cover those costs if you want.??

I don’t think anyone will be annoyed with you. In fact, your kids will likely be so happy to hear you have made a move that boosts your financial security in retirement. That reduces the likelihood they will need to step in and help support?you?later on. Which is the best gift you can give your adult kids. As for the memories in your old home, those move with you to your new home. The house didn’t make the memories. You did.?

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