If you're looking to trim expenses in Albuquerque, New Mexico, as you retire, downsizing to a smaller home is a popular strategy. Downsizing can reduce your mortgage payment, energy costs, and maintenance requirements, resulting in lower bills overall.
Realtor.com highlights the financial benefits:
"A smaller home typically means lower bills and less upkeep. Then there’s the potential windfall that comes from selling your larger home and buying something smaller."
This windfall is due to your home equity, which tends to increase over time.
Daniel Hunt, CFA at Morgan Stanley, emphasizes the importance of home equity for retirees:
"Home equity can be a significant source of wealth for retirees, often representing a large portion of their net worth. . . . Retirement planning can be complex, but your home equity shouldn’t be overlooked."
Your real estate agent can help you navigate the process, from setting the right price for your current house to finding a smaller home that fits your needs and budget.
Consider these questions if you're thinking about downsizing:
Do the reasons I bought my current house still apply, or have my needs changed?
Do I really need all the space I have now, or could a smaller home be a better fit?
How much could I save by downsizing?
Meet with a real estate agent / Realtor / Broker to discuss your options and understand how much equity you have in your current home. Downsizing could be a smart financial move for your retirement.
Mark Rutherford