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To Downsize or Not to Downsize? That is the Question.

Updated: Nov 27, 2023

Retirement is more than just a date - it's a new stage of life.

There are many questions to answer while retirement planning and where you plan to live is a big one. Financial planning for retirement is crucial if you want the freedom to live the life you’ve dreamed of without being held back by financial constraints. Changing your money management and debt situation are key as your income sources change.

Your home has required a significant portion of your income, time, and energy for years. Will it continue to be the right choice? Let’s work through some options together. If you are thinking about downsizing clarify what you want to achieve. The goal of selling your home is:

  • To increase your cash flow. Lower utility bills, unnecessary expenses and upkeep costs could mean you have extra money every month to spend on other needs or wants.

  • To reduce stress. Hopefully your mortgage will be paid off so you can achieve a certain ease in your life.

  • Simplify your life. With a smaller space there would be less room for things, and less time would be required to clean and maintain it.

  • Change your lifestyle. In the right location you could walk to your favorite places, spend more time with family, travel without the responsibilities of a home, or appreciate the convenience of being closer to health services.

  • To live in the home of your dreams. Being comfortable and satisfied may help you enjoy your many retirement years.

Timing is important. It’s important to be honest about what you want, your health, and capacity to maintain or fix up the home you sell or buy. You are revitalizing your life; ensure you have the energy and drive to do all that you plan. It’s one thing to take on a fixer upper at 35 and completely different at 65. Often people can wait too long to move and the lack of maintenance, outdated style, and age of the home erodes the proceeds of the house sale.

Is downsizing the answer? In fact, it is not the answer for everyone. You might have the home of your dreams. If you have “bad knees” the long corridors in apartments may impede your mobility. Your current neighbors are compatible and predictable. Renting a suite in your home could cover costs and hiring services could help your age in place.

It has been assumed for decades that downsizing will set you up with a nice retirement nest egg, however, that is not necessarily true anymore. Often the price of the home you want, due to style, age, and location, is equal to the proceeds you could receive from the sale of your home. You may need some of the proceeds to pay for the down payment or consider new debt tools such as line of credit or even a mortgage on the new home. Other costs such as closing costs, movers, and cleaners add to the bill. Your new neighbourhood may have higher property taxes, strata fees, etc. If you move into a condo you will have strata rules to follow and shared decision-making. You will still have to save money for home maintenance costs. Lastly, when you downsize you will have less room for guests, hobbies, and your belongings.

FFC clients often say,

“We answered questions we didn’t even know to ask.”

Keep asking!

We work closely with you as a trusted partner to produce a customized financial plan, so you can feel good about your money and establish peace of mind. Learn more about our approach:


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