Is Downsizing Early Worth the Effort? - June 2024

By Guest Blogger, John Cunningham, 

Cunninghams

Downsizing has long been a popular strategy for empty nesters, often several years after the kids have left home. But many homeowners hesitate to make this change due to established social networks, the daunting task of decluttering, and the challenge of finding a new home that meets their needs for the next stage of life. Let's unpack the current environment for downsizers, explore your options, and weigh the pros and cons to help you decide if downsizing early is worth the effort.

When considering a move that better suits your stage of life or lifestyle, it often boils down to one simple factor: Can you find the right type of property in the right location? Despite knowing that the Baby Boomers would eventually downsize, planners and governments have been slow to address this need. Fortunately, new housing options will hopefully start appearing in desirable locations within the next 12 to 24 months, making downsizing a more viable and appealing option.

The Reluctance to Downsize

There are several factors that hold people back from downsizing. Fear of the unknown, inertia, feeling overwhelmed, and not knowing where to start are common reasons. Established social networks and the thought of decluttering a lifetime's worth of belongings can also be significant barriers. It's no wonder many people find it easier to put off the decision. But delaying the inevitable comes often with higher costs and part of that is missing out on the new lease of life it often provides.

Who is Downsizing?

Downsizing is most common among retirees and those transitioning to retirement. Retirees often have more flexibility in where they can move, with many opting for coastal or rural areas where sea change and tree change developments offer appealing options. For those still needing access to the workplace but desiring a smaller home, the process can be trickier due to competition from both upsizers and other downsizers in the same market. So this is where research comes into play and understanding what all your options are, from size, type, location and budget.

Is There an Ideal Age to Downsize?

While there's no one-size-fits-all answer, many people start considering downsizing in their late 50s to early 60s. This age bracket often aligns with retirement planning and the desire to simplify life. However, some savvy planners start even earlier, securing a future downsizing property as an investment to leverage tax benefits and ensure a smoother transition when the time comes. Thinking about things outside the square of initial consideration can have huge benefits if you are prepared to be creative and as such take the next phase of life seriously instead of reactionary.

The Process of Downsizing

Downsizing involves several key steps:

Assess Your Current Home's Value: Understanding what your home is worth is the first step.
Research Potential Locations: Identify where you want to live and the types of properties that interest you.
Consult Professionals: Engage a buyer's agent to help find suitable properties, and work with an accountant or financial planner to assess the financial viability of your plan.
Decide on a Strategy: Determine whether to buy first or sell first, or explore renting your home while renting elsewhere to test the waters.
Declutter: This can be one of the most daunting tasks, but there are professionals who can help make the process more manageable.

Making the Process Easier

As outlined above downsizing doesn't have to be overwhelming. Seeking professional help can significantly ease the burden. Real estate agents, buyers agents, accountants, solicitors, and financial planners can provide valuable guidance. Decluttering services can help you sort through your belongings efficiently. Without a doubt the first step needs to be to get an accurate understanding of what your current home is worth followed by an investigation on where you would like to live and what types of properties would interest you or fit your budget, a buyer’s agent would help in the place very well and then a full analysis with your accountant of financial planner to understand the viability of the process for you. For example, do you buy first or sell first, or do you try renting your home out and trying living somewhere else by renting also. There are so many ways to go about it but knowledge and understanding are critical to ensure you are making the right decisions. I have seen far too many people dive in unprepared for what lies ahead and then live a life of regrets.

By leveraging the expertise of these professionals, you can make informed decisions and streamline the downsizing process and I can assure you that attempting all that is required in making the best decisions does not come easy, so get the right people on board early.

Life After Downsizing

On the other side of downsizing, many find a renewed sense of freedom and simplicity. With less maintenance and a property that better suits your lifestyle, you can enjoy more leisure time and pursue hobbies. Living closer to amenities, such as cafes, beaches, and parks, can enhance your quality of life. Downsizing can also provide financial benefits, potentially boosting your superannuation and allowing for a more comfortable retirement.

Looking at the upside, making a move to a home that suits your needs more whether it’s a sideways move with no change in the pocket or a regional move with some extra super is a great way to create a new lease on life, no longer are you wondering what to do, you have decided and can then live a good life knowing you are sorted. It is such a powerful physiological and mental health benefit and helps with positive aging instead ow wallowing in the past and not getting with life. 

In conclusion, while downsizing early involves effort and planning, the rewards of living in a home that better fits your lifestyle and needs can be immense. With the right approach and professional guidance, you can navigate the downsizing journey successfully and enjoy the many benefits it brings. So, if you're contemplating whether downsizing early is worth it, consider the possibilities and take that first step towards a more fulfilling next chapter.

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