Downsizing After Retirement – What to Consider
Downsizing homes generally means moving into a house that is smaller than your previous one. Once you retire, you may realize that living in a large home is unnecessary unless you have a family who stays with you often. Even so, you could still consider downsizing to a home that is more fitting for you and your lifestyle. Leaving your home can be an emotional road to go down, but it could also give you the fresh start you are longing for. If you want to downsize after retirement, here is what to consider.
When you should downsize
Retirement is the perfect time to downsize, and there are many signs that indicate it is that time. An example of this is finding that the maintenance around your home is more work than you can handle. From mowing the lawn, cleaning and standard upkeep, it can all be difficult as you grow older. It can especially become harder once you are late in retirement.
Retirement typically means your solid and steady income has come to a halt. You might have good savings and receive a monthly Social Security check, but you would want to put that money towards things that matter most to you, such as travel, leisure, and of course, spoiling your grandchildren.
When you delay downsizing in retirement, you will continue paying costly utility bills, property taxes, home insurance, and maintenance. Instead of spending your retirement savings on these home expenses, save money by downsizing homes.
Where to downsize
Once you decide it is time to downsize after you retire, you will need to determine where you want to relocate to. If your family is important to you, you might want to move closer to them; that way, you can spend quality time with your children and grandkids.
If you want to downsize and have a new fresh start in a new location, retirement is the time for that. The top three states to relocate to are Florida, Colorado, Delaware. If you have lived up North your whole life, move down south to Florida to soak up some sun! If you have lived in hot Texas for quite some time, move to Colorado and enjoy the snow and cool summers.
You will want to ensure you downsize at a location that has a great community and offers activities that interest you. For example, you should maybe avoid all college towns unless you don’t mind a fraternity waking you up at 4:00 AM on a Tuesday.
Having a hobby and participating in daily activities are also important in retirement. Seek out a town to downsize in that offers senior fitness facilities, senior centers, and places to volunteer at, such as animal shelters. It is common for seniors to become bored or lonely in retirement. So, be sure you downsize to a new city that can offer these types of activities to you.
Will your Medicare move with you?
Lastly, you will want to consider your health insurance. If you are in retirement, you likely have Medicare as your health coverage. Medicare is for American citizens who are 65 years and older and for people who qualify due to specific disabilities.
If you have Original Medicare and a Medigap plan, you can move anywhere in the United States with your plan since Medicare and Medigap plans do not have network restrictions. If you visit a doctor who accepts Medicare, then they must take your Medigap plan, as well. Having Original Medicare alone or with a Medigap plan is ideal to have when you move.
Medicare Advantage plans are different than Original Medicare and Medigap plans. If you have a Medicare Advantage plan, then you have networks of doctors and pharmacies you can receive your care from. So, if you plan on downsizing to a new location, you must notify your carrier ahead of time.
Once you notify your carrier before you move, a Special Election Period will open for you. During this Election Period, you will enroll in a new plan in your new location. Your Special Election Period will begin one month before your moving date and last for two months after the month you moved.
If you wait to notify your current Medicare Advantage carrier after you move, the opportunity of changing plans will end two months after the month you moved.
After retirement, there are many aspects in your life you must consider, and downsizing is one of them. If you currently love the home you live in due to all the memories it holds, that is okay! Enjoy your retirement where you are most happy. But, if you consider the pros and cons of downsizing and find more advantages, go ahead and start packing your bags and enjoy the savings and leisure you are about to take on.