Downsize Before You Retire
Don’t wait to downsize to a smaller home in retirement. Of course, selling your house isn’t the simplest way to catch up on retirement savings, but it can have a big impact on the amount you set aside over the next several years. You might even find that life actually gets simpler after moving.
Dunne, who is 60, said he and his wife moved recently from a four-bedroom home into a smaller townhouse. According to Dunne, the townhouse is about three-fourths the size of his old home, but their property taxes dropped by two-thirds, and insurance costs were cut in half. They also donated a lot of furniture because they didn’t need it for the smaller space. The donation earned them a charitable tax deduction.
Dunne said he still plans to work for several years, but he’s benefiting from the reduction in housing costs now. Plus, it’s a new home, so there aren’t frequent maintenance costs. And he doesn’t have to take care of a big yard. “I thought it was a great event when I gave away my lawnmower,” he said.