Getting Your Financial House in Order Before Downsizing

Many people my age are contemplating moving to a new home, one without as many rooms now that the kids have moved out.

They think about the opportunity for a new lifestyle. Maybe living in the city where they can metro or walk to dinner, shopping and events without getting in a car. Then there is the draw of the country with big sky, hills and valleys that are ever changing.

If you are in the contemplative mode, it’s a good idea to meet with a financial advisor who can help you assess how much house fits well within the parameters of your overall retirement plan.

Eric Jaffe, from Mosaic Wealth Partners, tells me they look at a host of factors, such as the amount of your anticipated income, the timing of receiving any such income from social security or a pension, and what an acceptable level of expense is, given those income sources and your other assets and investments.

Financial advisors can help you determine how much equity from your current home and/or how much in other assets to use as a down payment for your new purchase, what to keep as an emergency reserve fund, and what to draw down from assets and savings each year to supplement income and cover expenses including your new mortgage.

Sounds like a good strategy to put in place as you transition to pre-retirement and retirement.

Guest post and photo from Melinda Schnare, a real estate agent with RLAH Real Estate.

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