Pros and Cons of Down­siz­ing

The Saratogian (Saratoga, NY) - - BUSINESS -

Down­siz­ing is a great way to shrink your cost of liv­ing, which can help you get by in re­tire­ment or free up funds for sav­ing and in­vest­ing. Think it through care­fully, though, be­fore tak­ing any ac­tion. You might start by con­sid­er­ing how much of your home you re­ally use and need, how easy or hard your home is to main­tain, and how high taxes are in your town and state.

There are many ben­e­fits to down­siz­ing. For starters, if you move to a less costly home in your area — or fur­ther, to a less costly re­gion en­tirely — you can end up spend­ing much less in mort­gage pay­ments, prop­erty taxes, home in­surance, util­i­ties, main­te­nance, re­pairs and so on. All that money saved — and it could be many thou­sands of dol­lars per year — might be in­vested in re­tire­ment ac­counts, strength­en­ing your fu­ture fi­nan­cial se­cu­rity. Or it could get you out of debt, if you’ve been car­ry­ing a lot of credit-card or stu­dent-loan debt.

A new lo­ca­tion might of­fer other ben­e­fits, such as bet­ter health care, or eas­ier ac­cess to ski re­sorts, fish­ing streams or golf cour­ses. Col­lege towns at­tract many down­siz­ers with sport­ing events, arts per­for­mances, lec­tures to at­tend and cour­ses to take. Mov­ing into a city might let you dis­pense with a car and ac­cess ne­ces­si­ties and en­ter­tain­ment on foot or by pub­lic trans­porta­tion.

On the other hand, you might not want to down­size if you need room for friends and fam­ily mem­bers to visit reg­u­larly — or if they need a place to live for a while. You also might not want to move far from your so­cial cir­cle and sup­port net­work.

A fi­nal con­sid­er­a­tion is the cur­rent real es­tate mar­ket. If you do want to sell, wait­ing for a seller’s mar­ket would max­i­mize your gain. Al­ter­na­tively, you might stay put and rent out some space in your home in or­der to gen­er­ate in­come.

Learn much more about mov­ing, real es­tate and real es­tate in­vest­ing at our sis­ter site, Mil­

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