For many couples, downsizing makes a lot of sense during retirement. After all, when their kids are all living separate lives elsewhere, it is just not practical for pensioners to maintain multiple bedrooms in a larger house. For some people, however, the term “downsizing” is saddled with negative connotations conjuring a restricted, spare lifestyle where one is forced to make do with the basics. In fact, the opposite is true. Giving up excess residential space, for instance, means years of financial freedom and peace of mind.
These days, the Web empowers many pensioners who are looking to simplify their life and raking in profits by moving into a smaller home. There are online resources at Morris Dibben and the like which help in property listings. Numerous government sites also offer advice for efficient downsizing. Examples are those made available by the Australian Securities and Investments Commission’s MoneySmart and Camden Council. As for the upsides of downsizing, here are the top reasons why it is a great idea for couples who are facing retirement.
Reduce Your Cost of Living by Moving into a Smaller Home
A smaller home in a retirement community means a decline in your tax load, insurance, and mortgage dues. After successfully offloading your bigger home, you reap a tidy profit from the equity you’ve put into the property over the years.
When looking at prospective retirement communities, consider choosing one that offers bundled services like laundry and meals. Bundling services can save you money and adds convenience to your life. It is also a wise to get a feel for the locale. Take time to talk to the residents.
Another foolproof way to drastically lower your daily cost of living is to opt to become a renter instead of a homeowner. The latter can be especially costly if you have an older home that regularly needs maintenance work and repairs. As a renter, you have living expenses from the sale of your older home, minimal responsibilities for the upkeep of the rented property, and an opportunity to relocate in in-city rental housings where you have access to local attractions and shops. The downside to renting: each time you renew your lease, you will be subjected to inflation and your monthly rent may go up.
Trim the Fat from the Various Services You Use
Downsizing your monthly bills is easy. Go through the different services that you are paying for every month. Typically, you pay your landline provider, wireless carrier, internet service provider, and cable TV carrier. Enjoy a financially secure retirement by simply eliminating or consolidating the services you rarely or do not use. You are likely to have no need for your premium cable channels and extra minutes on your mobile phone plan, for example. If you only pay for a cellphone plan as a backup to your existing landline, then it makes much sense to subscribe to the lowest possible monthly plan. Also, compare the different bundling schemes offered by service providers. Consider choosing a VoIP-based communication system (which uses the internet instead of traditional phone lines), because it is so much more affordable compared to a landline subscription.
Switching banks works, too. You can save an average of £70 per year, according to the Competition and Markets Authority. If you tend to incur high overdraft fees, then switching banks can save you up to £260 per year.
Nix the Headache and Cost of Having Multiple Cars
If you only need one car, then it doesn’t make sense to keep on paying for upkeep and insurance for an extra automobile. The money you get from selling your unneeded family cars can always go into your investment or savings account.
It also helps to rethink your day-to-day driving needs. Do you really need a top of the line sport utility vehicle when a compact car that doesn’t guzzle as much gasoline will do? Don’t forget to explore alternatives, so you don’t end up with having to drive yourself as your sole means of transportation. While evaluating the range of nearby health care services in the area you are moving to, pay attention to transportation options, as well.
The key to having extra money on hand during your twilight years is this: find cost-cutting alternatives that enable you to keep the same quality of lifestyle that you love. Plus, adjust your mindset regarding downsizing as a condition where you have less. Instead, think of it as gaining more. You gain a stress-free and fulfilling retirement period, because you’ve made calculated steps to eliminate potential money-related woes.
Zak Allen works in retirement planning services and understands the issues that affect many people who are looking to downsize and make the most of their money. He likes to share his insights online and writes for a number of different websites.