Becoming an empty nester is a major life transition that often prompts parents to reevaluate their living situation. With adult children out of the house, you may find that your current home no longer suits your needs or lifestyle.
While downsizing and relocating can be an appealing option, it is important to weigh the pros and cons before making any decisions. Factors such as emotional attachment, financial considerations, and personal goals all come into play. Here are three questions for you to discuss with your spouse before you decide if downsizing is the right move for you.
1. Are we happy in our current home?
If, all things considered, you would prefer to stay where you are and potentially retire in place, then what are the other factors that have you considering downsizing?
If space is an issue, you might think about how to repurpose extra rooms, such as creating a dedicated office or hobby space, building a home gym, or making one of the kids’ old bedrooms more accommodating for visiting friends and family. If you are having a hard time justifying your mortgage, taxes, and utility payments, look for other ways to economize. Without kids, do you really need that second (or third) car? Are you paying for any monthly subscriptions or memberships you are not using? Will the monthly cost of household goods go down now that it is just you and your spouse?
2. What would downsizing cost us?
The housing market has been on a slow decline since the boom in 2022. But if moving after retirement has always been one of your goals, your house could still see a welcome market right now. Just make sure you talk through potential tax implications with your advisor and CPA.
However, if your goal is to downsize expenses, a smaller house is not necessarily going to be cheaper, especially if you move to another state with higher costs of living. Speaking of moving, that is not free either. What will it cost to ship all your stuff? Or are you budgeting to furnish your new home?
Many seniors look to renting as a downsizing option. While rent prices have declined a bit, the same supply-and-demand pressures that once heated up the housing market apply here as well. You could end up spending more on a smaller home while building no equity.
Also, do not overlook the emotional costs of a big move. Selling your house can be a stressful and exhausting process. And once you do sell, you will be elbowing around in this intense housing market with everyone else who wants to move. Downsizing could very well begin to feel like a job, especially if it stretches out for months.
3. What is on our bucket list?
Of course, the right sale and the right move could give your nest egg a cushion and open up some new possibilities for your retirement.
Moving could put you closer to activities you only got to enjoy on vacation while you were working, such as skiing, fishing, or country club sports. If your adult kids are starting families of their own, you could move closer to them so you can be an important part of your grandchildren’s lives. Or perhaps you and your spouse want to see as much of the world as you can. Downsizing could allow you to dedicate more of your resources to long cruises, first-class flights, five-star hotels, and fine dining.
Evaluate Your Plan With a Trusted Professional
Your life is going to be very different now that you are not working and raising a family. As your retirement evolves, your feelings about your home might evolve as well. If downsizing is an option you want to explore in more depth, let us see where this transition could fit in your financial future and start planning to get you where you want to be. At Wellstone Wealth Management, we can create a customized plan to help you weigh your options and shield your retirement for years to come. To schedule a free, no-obligation, “Get Acquainted Call” to see if we are a good fit for each other, call 503-594-1210 or email firstname.lastname@example.org.
Greg Allen is a CERTIFIED FINANCIAL PLANNER™ professional, Life-Centered Financial Planner, Managing Member, and second-generation owner of Wellstone Wealth Management, a life-centered financial planning firm that takes a unique Return on Life (ROL) approach to help their clients live the best life possible with the money they have. With over 20 years of experience, Greg holds fast to his mission of helping clients plan their finances around their lives, instead of the other way around, resulting in fulfillment, confidence, and a meaningful life. Greg also provides a caring, trusted long-term relationship and life-centered financial behavioral counseling. He specializes in working with people who have recently retired or are close to it (typically five years or less) and relates well to corporate executives and upper-management couples who often have complicated financial pictures and need help maximizing their wealth, reducing their taxes, and preparing for retirement so they can maintain their ideal lifestyle.
When he is not helping his clients find meaning and purpose, you can find Greg spending time with his friends and family, especially his wife, Sandy, children, and grandchildren. As a native Oregonian, Greg loves the outdoors, visiting the Oregon Coast, and retreating to their family cabin in the mountains. He enjoys staying involved with his church, reading, watching sports, and anything to do with exercise and wellness. To learn more about Greg, connect with him on LinkedIn.
Information provided herein is provided by Wellstone Wealth Management, LLC. This information is for general informational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Information was compiled from third-party sources believed to be reliable and accurate but cannot be guaranteed. Investment advisory services are offered through Oswego Wealth Advisors, Inc., an SEC Registered Investment Advisor. Neither Wellstone Wealth Management, LLC nor Oswego Wealth Advisors, Inc render any legal, accounting, or tax advice. All investments involve risk, are not guaranteed, and may lose value. We recommend that all investors consult with a qualified adviser to assess your personal situation before implementing any strategy.
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