Older Americans have a record-high level of property wealth, according to a new study for the National Reverse Mortgage Lenders Association (NRMLA).
Housing wealth increased 1.95% ($11.81 billion) to $226 billion in the 12 weeks to December 31 compared with the previous quarter. It’s the highest level recorded since the study began more than 20 years ago.
The findings are continuing evidence of how property remains an outstanding long-term investment.
For many older Americans, this may be the ideal time to explore downsizing to release equity in their home and give themselves more spending money for their retirement.
Recent data from the industry researcher CoreLogic indicates that value growth is slowing across America. Our 21-month streak of monthly, year-on-year rises has now slipped back to single digits, registering 8.6% last November.
If you are thinking of selling your property and finding a dream home for your leisure years, here are a few quick downsizing tips to get you started:
Big decision
Don’t rush into downsizing. Many downsizers find it helpful to discuss the plans with their children, who will often be emotionally invested in saying a permanent goodbye to the family home. It is helpful if they understand and support your decision.
Your future
Consider what type of retirement you’d like, as it can affect the style of property you purchase. For example, folks who want to travel the world love secure apartments. When it’s time to go, they just close the door and head for the airport, knowing their home and vehicle are safe.
The right time
There are several signposts on the journey to downsizing. One of the most obvious is becoming tired of home maintenance. Cleaning gutters and mowing lawns can become too much in your later years.
Too much space
If you feel your home is empty now the children have flown the nest, it’s probably time to downsize. Rooms that are never used still need to be heated or cooled and cleaned.
Cost factor
In our later years, it’s common for our earning capacity to reduce. That’s fine, but your home will still rack up maintenance bills. After a while, it starts to feel like it’s sucking up all your precious cash.
Use experts
A key benefit of downsizing is to release equity in the family home to give you cash for your retirement. That doesn’t happen automatically, though. Talk to a financial adviser before doing anything to ensure you get your anticipated financial outcome.
NOTE: The information in this article is general in nature and provided as a general overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.