Retirees Can Go Big By Going Small
Many people are reaching the point in their lives when they need to decide where they want to live when they retire. If you’re a homeowner approaching this stage, you have several options to explore. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors (NAR), says:
“As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millenial and Gen Z children or if they stay put in their own homes.”
Lautz lists two options: move into a multigenerational home with loved ones, or stay in your current house. Multigenerational living is rising in popularity, but isn’t an option for everyone. And staying put may fit fewer and fewer of your needs. There’s a third option though, and for some, it’s the best one: downsizing.
When you sell your house and purchase a smaller one, it’s known as downsizing. Sometimes smaller homes are more suited to your changing needs, and moving means you can also land in your ideal location.
Downsizing in St. Augustine
It’s no secret that Florida is the retirement capital of the United States. 8.6 million people 50 years or older call the Sunshine State home, the second largest total behind California. St. Augustine, in northeast Florida, is an under-the-radar choice for retirees looking to be surrounded by history and romance.
Commonly recognized as America’s Oldest City, St. Augustine is perfect for those looking for a slower pace of life — without sacrificing the benefits of larger municipalities. Jacksonville is just a stone’s throw up the road and local events, like the Players Championship, attract national audiences year after year.
It’s also no secret that beachfront real estate comes at a premium price. For those looking to downsize, or purchase a seasonal property, being open to downsizing can actually expand your options. By looking at properties with a smaller square footage, you can find a home closer to your dream location — steps from the beach or walking distance to the restaurants and art galleries of St. Augustine’s historic downtown.
Downsizing Can Increase Your Retirement Income Stream
In addition to the personal benefits, downsizing might be more cost effective, too. The New York Times (NYT) shares:
“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.”
Being in a strong financial position is one of the most important parts of retirement, and downsizing can make a big difference.
A key part of why downsizing is still cost effective today, even when mortgage rates are higher than they were a year ago, is the record-high level of equity homeowners have. Leveraging your equity when you downsize can lower or maybe even eliminate the mortgage payment on your next home.
So, not only is the upkeep of a smaller home more likely affordable, but leveraging your home equity could make a big difference too. Your local real estate advisor is the best resource to help you understand how much equity you may have in your current home and what options it can provide for your next move.
If you’re a homeowner getting ready for your retirement, part of that transition likely includes deciding where you’ll live. Let’s connect so you can understand your options and explore downsizing opportunities.