Home & Garden

Downsizing requires a lot of thought

Steven Sass is an economist and an expert on retirement planning. Yet he acknowledges that he and his wife, a fiction writer, are uncertain about their retirement housing plans.

Both agree they’d like to downsize from their sprawling two-level contemporary to a smaller, single-story space. Both also wish to stay in the Boston area, where their four grown children and three grandchildren reside. But beyond that, they’re conflicted.

“I’d like an urban setting, but my wife wants something more bucolic,” says Sass, a program director at Boston College’s Center for Retirement Research.

When reviewing options, he stresses the need to take a methodical approach that factors in the expense of selling one home and moving to another.

“Downsizing – which means moving to a less expensive home, not just a smaller one – usually increases your income by reducing your housing costs. But remember that the cost of downsizing usually runs about 10 percent of the value of your house,” Sass says.

People downsizing can’t afford to ignore financial issues, says Fred Meyer, a long-time real estate broker. He says retirees are often happier living in a modest home while pursuing their post-work dreams.

Leo Berard, charter president of the National Association of Exclusive Buyer Agents (www.naeba.org), says it’s crucial to plan ahead for a move in retirement. Here are a few things to consider:

Moving near the kids. Think through the implications. Many retirees yearn to see more of their grown children and grandchildren. And they’re willing to consider a distant move.

Perhaps you relish time with your offspring. But how would you feel if asked to take on the role of regular baby sitter for young children?

It’s also possible that your adult children will be less than thrilled having you live in the same neighborhood. Berard recommends you have a candid conversation before committing to the move.

Explore that paradise. Glossy ads tout the idea of moving to faraway places for retirement, where it’s said the scenery is beautiful and the cost of living low. But in spite of all the hype, many who choose them find them less than satisfactory, says Eric Tyson, co-author of “Home Buying for Dummies.”

What’s the best way to determine if a resort community would be a good place to retire? “If possible, take a lengthy vacation there or rent a place there for a month or two,” he says.

Examine your finances. Do you lack substantial retirement savings and expect to rely on proceeds from the sale of a large family home in your future years? In that case, Berard recommends you plot a strategy with a trusted financial adviser or accountant before making any sudden move.

“You want to carefully time the sale of your present property before you buy another one,” he says.

For most people, a comfortable retirement means relief from large house payments.

“After downsizing, it’s always great to be free and clear of all mortgage debt. That’s because cost of living factors are huge in retirement,” he says.

Staying put. Seriously consider buying in the same general area where you now live. Experience has taught Berard that most retirees do best when they live within a 30-minute drive of their former home.

He says that retiring to a distant location can be a poor choice for those who are actively engaged in volunteer work with charitable or religious groups. “The odds are, you’ll find retirement a lot more meaningful if you stay where you’ve built a strong support network of family and friends,” Berard says.