Downsizing can be beneficial for many retirees. Moving into a smaller home can help with mobility issues that we all face as we age. You’ll also be able to travel more when you reduce your household expenses. But downsizing can be overwhelming and there’s no reason to rush into it. You should take your time and begin the process slowly.
Learn more about the ways to downsize your home for retirement.
Before you move into a new home, you’ll need to sell or donate items like furniture, knickknacks, or clothing. Selling unused or unwanted belongings can also help you raise money for moving expenses. You can sell them in your community or online, like Facebook Marketplace or Craigslist. Plus, donating things to charities is always an option. And if the idea of sorting through your home seems impossible, you can hire an expert to help you.
Coping With Change
Sorting through decades of memories and belongings can be great, but it can also be very draining. It can be helpful to ask a friend, neighbor, or a family member to help you go through your things. They can help you reminisce when you come across a sentimental item and give you a nudge when you need to let something go.
Selling Your Home
Once you’ve donated and sold everything and you’re calling the real estate agent to put your home on the market, there are some aspects you should be aware of:
- You might have to pay a capital gains tax, which is the difference between what you paid for your house and what you sold it for. But you can exclude up to $250,000 if you’re single, or $500,000 if you’re married.
- The profit you make when you sell your home could affect your government assistance benefits, like Medicaid. But there are ways around it and talking to a financial advisor will help you figure out how to keep your benefits.
When looking for a new home, if you’re serious about downsizing, you’ll want to find something small that reduces costs like utility bills and requires less maintenance. Some retirees go so far as to get a tiny home that’s only 100 to 400 square feet of living. But before taking that drastic of a step, you would have to do research before building a tiny home.
Regardless, there are easy ways to downsize your home for retirement, and if you do, you’ll have an opportunity to see the world!