Downsizing in Retirement

The above photo is something we had in our house in Minnesota and now it is in Arizona. The saying “LIVE, LAUGH, LOVE” can be followed in any part of the country that you live in. It also can be followed or done in any size house, condo or apartment you live in. You don’t need a big house at retirement to be Happy.

Just because you may downsize your home or vehicles doesn’t mean that you won’t have the same amount of fun during retirement. Some people say they enjoy retirement more since they downsized. One of the fun part of being retired or semi-retired is that you have more time to meet new people and learn from them.

The other day when golfing with a new friend got me thinking about this subject more. The past few years we have been working on our parents to downsize and move in with us in Arizona. My friends name is Neal. He said he lived in Washington most of his life. He still has family in Washington area. When Neal retired he picked to live in Arizona about 10 months of the year for the great weather and all the golf courses.

Neal has a good pension and seemed well off. We didn’t get into his exact net worth but he will be fine in his retirement years even though he retired early and took out Social Security at age 62. He said he ran the numbers against if he would wait till 67 and get a larger monthly amount and it wasn’t a large enough difference for him to wait. I still hope I can wait till age 70 till I get my first social security check. Where else can I make about 8% interest on my money by delaying till age 70? I know longevity doesn’t run in the Mills family but I still would like to wait. I would love to see 100. As long as I could still golf. LOL My Financial planner still wants me to project till age 94. Crazy in my opinion.

Neal does seem financially responsible in the area of downsizing. He bought a small condo down here in Arizona and when he goes back to Washington for a few months he stays with his folks or one of his kid’s houses. He said he didn’t want a big house to take care of or a yard to mess with. He said he moved to Arizona to play golf during the day at least 3 days a week and ride his Harley anytime he wants. Since in Arizona we hardly ever get rain during the day and if it does rain it normally is in the late afternoon and doesn’t last long. He also said he took his Harley back to Washington for the two months and only had the clothes he could fit on his Harley. I asked what about your golf clubs and he said his old set of golf clubs he keeps at his folk’s house in Washington. Smart thinking on his part.

Sure everyone has different views on downsizing and retirement plans. A lot of people I have talked to over the years have many different worries. Some also worry about moving out of there house that they may have lived in for over 40 years. They stress about how to downsize there belongs enough to fit into a smaller house. I say start now, get selling stuff at yard sales, Facebook, Craigslist, E-bay, Poshmark, Letgo, and Offerup or where they are comfortable selling stuff at. Or you could donate stuff to charity like Salvation Army or you’re Church. Each way has benefits and minuses which I won’t go into now. One thing we try to do is if we haven’t used something in the last two years we get rid of it while it may still have some value. It can be a stress reliever to some people as they declutter there house. I enjoy having our junk gone. I think of some of my friends that would spend over $100 a month to store their stuff, crazy.. You could go buy new stuff if you ever needed it instead of storing at a yearly cost of over $1,200. Or to make that much money you would have to own $26,315.78 of GM Stock to make a dividend of $1,200 a year. Crazy I say. I am not a fan of paying for storage.

Here are a few quick advantages to downsizing. I know this list can be larger for others:

1. More Money to spend on your Retirement fun. Cash flow is king when you aren’t working anymore. I believe in Budgets at home like you would at work.
2. More time to do fun things. Why spend time cleaning a big house, working on the yard or fixing things around the house. Time is so valuable at any age. Why waste it living in a big house? More time to travel to see friends and family. More time to knock things off your bucket list.
3. Lower Utilities bills and lower taxes possibly all equals more Cash Flow. More money to do the fun things you have been putting off.
4. Be able to travel around and spend time in places where you want to retire someday without having to buy right away. One could I talked to just traveled the US in warm states for five years till they settled in Arizona. I am a fan of Arizona. Why wouldn’t I be, we have a small chance ever of having Hurricanes, Tornados, Alligators, Sinkholes. We also have less humidity and less bugs. We have a ton of days of Sunshine. If I want Snow I can drive two hours to Northern Arizona and go Snow Skiing. Also we pay pretty low property taxes also. We are set here.
5. Less Space for family members to hide so it could bring the family closer in downsizing

Here are a few dis-advantages to downsizing that some folks may feel:

1. Less room for family or friends to stay with you. Of course some of our family and friends hasn’t visited us since for over 18 years. I would think if you really felt it was important for you that you could get a two bedroom instead of a one bedroom for guests that may come visit.
2. Family memories can be tied to your old home and neighborhood. That can be hard to leave for some. I have moved over 15 times and found that Photos and Videos work well and you do make new friends. The small percentage of friends that keep in touch with you after you move are the real friends.
3. Moving stress. It can be stressful deciding what to get rid of. Also stressful the thought of relocating to another place. Some stress also from not keeping up with the Jones and having pride in a big house and yard. Or stress from not having a yard to work in. Also looks messier than a big house can cause stress.
4. Noise problems. There can be a lot more noise in a smaller house or apartment than you had in your house.
5. Not having as many nice things since your place is smaller.

Cash flow is king still. I have heard that average retirement downsizing could save you $8,500 a year in your house hold expenses. Of course it could be lower or higher for some. If you lived in California or Chicago that number would probably be over $20,000 a year depending on the house you are downsizing from. But let’s say you could save roughly $8,500 per year you would need $186,403.50 in GM Stock to make $8,500 a year in Dividends. Wow..that is a lot of your retirement money just going towards not downsizing. I would rather have that money to enjoy my retirement years.

 

Read on to learn more about our downsizing plans. Click on the below link

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Bruce of MillsWay.com




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