Two ways to downsize

downsizing home to a smaller oneOnce you hit the Decumulation years, a common option new retirees consider is Downsizing from a large urban home. Friends of ours on our street are about to put their home up for sale in order to move to a small town an hour away. The difference in the home values will constitute a major nest egg to supplement meagre government pensions and part-time work.

Wednesday’s Financial Post has two articles on this theme. In the RRSP Special Report (I also contributed an article on a different topic), Garry Marr describes the strategy of finding lower-priced homes in small towns:

The small-town appeal is a huge factor for retirees because it can allow them to sell their house in a large city and extract the equity, which they can then live off for their remaining years.

Top reasons to rent during retirement

In the same report, financial planner Ted Rechtshaffen describes the alternative option of selling your home but instead of purchasing a smaller one or moving to a small town, choosing instead to rent. An online link wasn’t immediately available but here are his ten reasons to rent during retirement:

1. You can’t afford it

2. You don’t want to carry debt

3. You don’t want the responsibility

4. You don’t want to pay any more realty commissions and land transfer taxes

5. You don’t want to be trapped in a home you can’t sell quickly

6. You want to spend more money while you are healthy enough to enjoy it

7. You want more diversification

8. You want to test out different homes and places

9. You may be needed out of town

10. You are spending less and less time at “home” anyway



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