Have you been looking at your home and wondering if you need all that space now that the kids, pets, and/or parents have moved out? Or are you trying to decide how to continue to live the “Good Life” on a reduced retirement budget? If so, you probably have thought about downsizing. Here is a seven-step plan to help clarify if downsizing is right for you and, if so, how you should proceed.

1. What does “downsizing” mean to you and your partner?

The first thing you should define is what “downsizing” means to you. Less maintenance? Less expense (“financial downsizing”)? Or a change in lifestyle so you have more time to travel and see friends and family? In essence, you are reestablishing your priorities for the next five or more years, and house size is just one aspect. Housing needs to integrate with your financial plan, your work plan (if you are still working) and your leisure time plan. You want to adapt your housing to your life — not the other way around.

2. What is your financial plan?

Your financial plan is the foundation of your five-year plan and for most of the major decisions about housing. Sit down with your partner and your financial planner and decide on a realistic budget for housing, travel, food, medical expenses, and all your other major expenses. Without a clear idea of your budget for housing, you are planning a trip without a map!

3. What do you want to be when you grow up?

In many ways the retirement years are like being 18 again (and in many ways NOT!). You have a blank slate in front of you. Relocating may be part of the plan if you want to be closer to grandkids or best friends, or if you are just ready to live in the mountains. “Moving to Florida” is not a plan in and of itself. You need to know how you and your partner will spend your time and then see how to merge your activities and housing within your budget.

4. What purpose does housing serve in your life?

Housing serves many purposes. At its most basic, it provides shelter and safety. As you move up the hierarchy of needs it can also provide a place to raise children, a place to entertain and be with friends, a place to recreate, or an investment. Think about what you really need for your life. Get back to the basics of WHERE you want to live (to support the activities you identified in #3), HOW MUCH the budget allows, and WHAT you really need to accomplish your goals. Assess whether now or in the future you will need architectural accommodations such as one level living or wheelchair accessible bathrooms.

5. What are your “WANTS” in housing?

This is the most dangerous step! It is an opportunity to destroy the progress of the last 4 steps. If you are lucky enough to have gotten through step 4 and you are “under budget” for housing, you can carefully start looking at the “upgrades” that will enhance your life. These may include higher quality finishes or community amenities such as water privileges or golf. This is another point for a long discussion with your partner and some realistic self-assessment.

6. Write your housing spec.

Seriously, write it down! Review it after a week or a month. Make it as concrete as possible. Visualize what downsizing will be like. This is part of your 5-year plan, and you need to spend time thinking about it! Remember, if you do not know where you want to go, it is unlikely that you will be happy with where you arrive.

7. Show your spec to your Realtor.

I can’t tell you how many people have come to me saying, “I want to downsize.” I love helping people, but they will spend a lot of their time randomly looking at houses hoping that “they will know it when they see it.” They would save money, save time, and likely have a better outcome if they knew what they wanted and were able to explain it more clearly.

You have worked hard to get where you are today. You owe it to yourself to plan the next phase of your life to get the most for you and your partner. Housing is a key element of your life and can pay big dividends with proper planning.

Reid Buckley, MBA, is a third-generation licensed real estate agent and waterfront specialist with The Mr. Waterfront Team of Long & Foster Real Estate. She can be reached at 410-266-6880 or via email at Reid@WaterfrontHomes.org.

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