Experienced financial advisor Darcy Bergen specializes in retirement planning and risk management. As the president of Bergen Financial Group, Darcy Bergen advises clients who are undergoing major lifestyle changes, such as retirement and downsizing.
Downsizing is a good option for retirees looking to simplify their lifestyle and reduce their financial liabilities. Buying a smaller home in a planned community can also remove maintenance responsibilities, which can bring peace of mind to older homeowners. In certain situations, downsizing can leave homeowners mortgage-free with more money to invest.
However, downsizing doesn’t always mean a smaller space or a less expensive home. For example, people who want to retire in the city center may pay more for a smaller space that comes with more convenience and less maintenance. Additionally, some retirees may move to a more expensive area to be closer to other family members or to live in a warmer climate.
Before downsizing, homeowners should work closely with a financial advisor to determine the advantages. In some cases, rather than downsizing right away, homeowners may be better off paying a high mortgage for a few years and selling in a better market. Moving costs, realtor fees, and other expenses should also be considered.