Adapting to life on a retirement income can take some getting used to, especially if you have not taken the time to prepare. For some, living off of retirement income may mean having to make significant changes to spending habits. Fortunately, with the right preparations, you can be ready for these changes and in an excellent position to enjoy your post-employment years. A good first step is to consider how you will go about downsizing during retirement.
Work Out a Budget Beforehand
When you are getting close to being able to retire, it can seem like your entire focus is on crossing the finish line so you can begin. However, before you are in the home stretch, it would be good to take the time to create a realistic budget with your expected post-retirement income. Once you get a sense of how much you need to live comfortably, you can see how much your retirement can actually cover and make any necessary adjustments.
Recognize Added Expenses
As you are creating your budget, you are likely to see at least a few line items that may not be necessary in your retirement future. For example, you may love to exercise and have two gym memberships because one facility is close to the office, and the other is good for home. The work membership can probably be eliminated when you retire. If you have an extra car just to get to and from work, consider selling it, and you can stop paying the insurance. Likewise, if you pay for a pool or dog walking service because you are working, you may be able to stop paying for them when you retire and can take care of these tasks yourself.
Deciding to Sell Your Home
For homeowners, one of the most significant downsizing moves is selling a property. For those who have considerable equity and are living in a home that is too large for their needs, selling may be the right decision. However, selling and purchasing real estate is a complex calculation that involves a detailed analysis of market conditions, interest rates, and home value estimates. Before putting a “For Sale” sign out, it will be essential to understand the real estate market where you are buying as well as selling.
Downsizing can be a smart move as you get ready for retirement, but it’s important to know what you will need financially before you get there. Additionally, it’s vital to have a plan for how you will manage your income so that you can live comfortably. One of the best ways to prepare is by discussing your retirement goals with an experienced attorney who can help you assess your assets and create a plan. At the Law Office of Alice Salvo, we have the experience you need to plan for your retirement future. Schedule a consultation today to explore your options and start your solution.