Is Downsizing on Your Bucket List This Year?

DownsizingThere’s a ton of considerations you need to examine before you make a decision to downsize.

Downsizing your home can have a financial effect, especially for your pension and your estate planning. This was the advice in a Starts at 60 article, “8 things you need to know before you downsize in 2017. Here are a few important things to consider when downsizing.

  • Allow yourself plenty of time. Start the downsizing process early. Plan the move several years in advance, so you have time to see where you’d like to move and to crunch the numbers.
  • Ask for advice. Buying and selling a home can be a real emotional event, so ask a family member, friend, or financial adviser for a second opinion or a fresh pair of eyes to review the situation.
  • Review any impacts on your pension. You should determine what effect your move will have on your pension.
  • If you’re headed to a retirement community, figure out what would be left were you to move again. Many retirement communities charge what is called a Deferred Management Fee for each year you live there. For every year you live in the retirement village, you’re charged a fee, which is taken out of the proceeds when you choose to sell your home. It’s possible the amount you leave that retirement village with when you sell, will be less than what you paid.
  • Consider regular fees the facility may charge. There may be a monthly fee to defray some of the expense of running the village.

Here are a few “Don’ts” to remember:

  • Don’t purchase a new home before selling your old one. Don’t sign a contract on a new home until you sell your old home. If you sell your home first, you eliminate extra stress, and you’ll know your financial status. This makes it easier to buy the next home.
  • Don’t be overly itchy to move when you’re not ready. If you have doubts that a move will make sense financially, there’s no harm in staying put. If you stay a little longer, you can avoid a stressful move.
  • Don’t sign any contracts until you get unbiased advice. It’s a busy time and contracts can be complex. Ask an attorney to review them before you sign anything. You should also check with your estate planning attorney to make sure that the numbers work with your estate plan.

Reference: Starts at 60 (December 28, 2016) “8 things you need to know before you downsize in 2017”


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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.