Downsizing for retirement! You probably have heard of this from your ready to retire co-workers all the time. You probably thought about downsizing for retirement many times but just could not seem to pull that trigger and start with the process. Fearful maybe?
You have worked for forty plus years, raised your family, upsized to your third larger home and have accumulated so much “stuff”. This could be your first marriage or your fifth marriage, it does not matter.
Your children are all adults now, they have their own families that they are working on, and now you have this rather large home to maintain with no help except you and your spouse.
You are looking forward to retirement, maybe want to travel, maybe want to start a side career that matches more your passions. Maybe you just desire to have less “clutter” in your life or maybe your back started bothering you and going up and down the stairs is becoming more difficult to do now too.
You have reached a point now that just maybe less really is more.
Let’s look at some reasons for downsizing for retirement and why it works.
You put more money in your bank account
If you simply took an inventory of your possessions and went through it in your mind, you may come to conclude that at least half of what you own you may never use. However, it could very well be great items that someone could use in their lives now.
You could have what I would like to call a Lifetime Accumulation Inventory Reduction Sale (LAIRS). Some people call these garage or yard sales.
Yes, you never get back what you paid for them, but you will get back something. The rule would be if you do not use it for over 12 months as a seasonal item or with the exception of some very sentimental items, you should either sell it, give it away or throw it away. Just doing this will start to declutter your life and put more money in your bank account.
You get more time back
The one concept that people sometimes forget about is that no matter what, “stuff” always requires your time. Even if it is in storage, there is an expense that came from your time, or you simply have to decide if you want to keep spending your time maintaining your “stuff” or paying attention to it.
Retirement is about the freedom to spend your time your way. If you have to spend time with your “stuff”, does that give you the time you want?
Do you control your time or does your “stuff” control your time?
No need for that big size family house
Okay, this is the big one. The children are all gone. They only visit you right? Why do you still need the mega-mansion to survive? Let’s assume that your home is at least a 5 bedroom, 3 bath home. Would a nice 3 bedrooms 2 bath home for half the value in a nice area work just as well for you? Strong possibility that it would.
So you sell your $300,000 plus home and opt for the $200,000. You have just added $100,000 to your bank account in simple terms. Does that free you up for doing your other passions or pursuits in life? Just maybe it will.
The point is that the less “stuff” you have to maintain in your retirement years the more enjoyable it can be. So here is a suggestion.
Start about 5 years away from retirement or immediately if less time on your horizon and have several garage sales per year. Also, start taking inventory based on the 12 month or sentimental rule and start giving things away or throwing away.
You can painlessly and systematically downsize your life over five years and obtain a much higher quality of life as a result. You are simply swapping one quality of life you needed when raising your family to possibly a higher quality of life as you are not in the same place in life as before. Downsizing for retirement makes perfect sense, however, the choice is yours.