Downsizing in Retirement? 3 Things to Look for in a New Home

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You may want to check all of these off your list.

Key points

  • Many retirees downsize to save on housing costs.
  • There are certain home features that could make your life more pleasant and less expensive.
  • Seek out nearby amenities, energy efficiency, and low property taxes when house hunting.

Owning a larger home makes sense for a lot of families when they’re working and their children are young. But once retirement rolls around, many people choose to downsize.

At that point, a lot of seniors wind up on a fixed and more limited income, and downsizing can be a great way to spend less on housing. Plus, by the time many people retire, their children have grown up and moved out of the house. And so it can be harder to justify hanging onto a larger home with rooms or areas no one is using — even if the mortgage on that property is already paid off.

But if you’re thinking of downsizing with the goal of saving money, there are certain features it pays to look for in your new home. Here are three worth focusing on.

1. Access to amenities

Once you retire, you’re apt to have a lot more free time on your hands. And filling up those hours could cost a fair amount of money. That’s why it’s a good idea to buy a home that offers you access to different types of amenities and entertainment.

Many people who downsize in retirement move to a townhome or condo. That way, there’s less square footage and less maintenance involved.

Condos and townhouses commonly charge HOA fees, which you’ll need to factor into your monthly budget. But in exchange, these communities often offer amenities like on-site fitness centers, tennis courts, swimming pools, and a clubhouse with social events. Having these amenities at your fingertips could help you stay busy and avoid having to spend a lot of money elsewhere.

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2. Energy efficiency

Once you retire, you may end up spending a lot more time at home. And so your utility bills have the potential to climb. That’s why it’s important to find a home with energy-efficient appliances, and also, a home that’s properly insulated (especially if you live somewhere that’s subject to extreme cold or heat). That could help keep your bills to a minimum at a time in life when you may be eager to conserve cash.

3. Low property taxes

Property taxes can be a huge burden for retirees — especially since they have the potential to rise over time. That’s why it’s important to purchase a home whose property taxes are reasonable to begin with.

But don’t assume that downsizing will automatically mean lower taxes. If you buy a newly constructed home, your property tax bill might be high by virtue of that alone. On the other hand, if you buy a smaller home that someone has lived in before, you could end up with a significantly lower property tax bill — even if both homes are comparable with regard to upgrades and condition.

Downsizing is a move that makes sense for a lot of retirees, and it could be a good bet for you. But make sure to find the right replacement home — one that truly offers you the money-saving opportunities you’re after.

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