When the last of your kids moves out of the house, it’s time to consider moving out yourself. By that we mean downsizing your living space to save cash during retirement. It’s something all soon-to-be retirees should mull over.
According to a recent study from the American Association of Retired Persons, 17 percent of empty-nesters said they plan on moving into a smaller home. Eleven percent said they plan on moving to a new city, and 10 percent said they expect to move to a new home. That’s a lot of moving, and for good reason: While the home you raised your kids in has lots of sentimental value, it simply might not make financial sense to live there as retirement nears. As USA Today reports, empty-nesters who have owned their homes for a decade or more are likely to be able to sell their homes for a profit. That money can then be used for a big down payment on a smaller home and to pay down other forms of debt. Moving to a smaller house will also free up cash, as the mortgage, bills and upkeep costs will all be lower. That means more cash for things like investments and traveling during retirement.
The first step toward deciding on downsizing is to have the conversation with your partner. Discuss your retirement plans and if moving makes sense. There are plenty of positives to downsizing, but can be difficult. Like we said, there are a lot of emotions tied to the home your kids knew. Talk it through and see what feels right for you.