What are the pros and cons of downsizing for retirement?

As you’re getting closer to retirement, you may be considering downsizing. This might be a tempting thought—less space to clean and maintain. And, if you can free up equity from the family home, there may be more money for retirement. So, what’s not to like?

While the appeal of a smaller house to clean and that extra cash in your pocket can be high, the process can be long and stressful. Take your time. Don’t rush the decision. Ask family and friends who’ve been there, done that. And look carefully at all the potential pros and cons of downsizing, including the ones listed below.

Additional considerations and tips for downsizing, no matter your decision

• Start decluttering now, to help make your move easier.
• Keep in mind that closing fees, real estate commissions, fix-up costs, and moving expenses can gobble up some of your profit.
• Spend time with a calculator, and be realistic about the numbers.
• Ask an independent advisor to weigh in.
• Be open to both resale and new properties to help find a unit within your budget if you’re considering a condo.
• Try renting first if you’re considering a smaller town, lakeside cottage, or something far from your current home for a few months or longer to get a sense of the seasons, the people and surroundings, how far you might be from things you really love, and other important lifestyle factors.
• Think through all your options, including renting versus buying. You may be able to invest the proceeds from your home sale and use the interest income toward rent.