Tuesday, October 13, 2015

Downsizing in My Retirement

Oct. 13, 2015

Dear Cathy:

When my husband and I both retire in a few months, he wants to move to another state to a smaller home.  He is looking for a state with lower taxes?  Is this a good idea?  Moving When Retired, Washington, DC

Dear Moving When Retired:

Many retirees want to downsize when they retire but their egos tends to get in the way.  They think moving into a smaller home will cut back on their monthly expenses, but that tends not to be the case.

They may move into a smaller home, yet the money they save in mortgage payments ends up going to remodeling the home or a new car payment.  When giving up the space, make sure you are actually reaping the benefits.

When downsizing many retirees consider relocating to states that have lower taxes.  This should not be the main consideration when looking to downsize and relocate.  Remember that state taxation rates are always subject to change.

The best way to downsize is to purge your life of things – things that you no longer need.  Downsizing during your retirement years should be about putting more money in your pockets so you can afford to buy organic foods and engage in regular health activities, which in the long run will help you live a longer, more energetic life as you age.

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