How Can Seniors Downsize During Retirement?
Virginia Beach, VA (Law Firm Newswire) April 10, 2015 – During retirement, seniors are typically operating on a much tighter budget than they were during their working years.
This is especially the case when major life events, such as an early retirement or a health problem, have made finances tighter. Downsizing can be an important strategy for making retirement funds stretch farther, and there are a number of different methods.
“It is important for seniors to evaluate their particular financial situation in order to make smart decisions about what should stay and what should be altered,” said Andrew H. Hook, a Virginia elder law attorney with Hook Law Center, located in Virginia Beach and northern Suffolk.
Selling the family home and moving into a smaller one is one of the most common ways to downsize. A smaller home means a lower mortgage payment, lower insurance premiums, reduced taxes and fewer maintenance costs. Some seniors opt for retirement communities, which may provide services like meals, laundry and social activities as part of their cost. Many also have the option to transition to a higher level of care later on. The financial impact can be especially large if a senior’s move relocates him or her to an area with a lower cost of living.
Many seniors can benefit from selling their second car, if they have one, which can provide some immediate cash flow and provide savings on insurance, gas and car maintenance.
Donating to charity is another downsizing option which can be helpful. Donating gently used clothing, furniture and tools can add up to a significant tax deduction. Be sure to keep clear documentation of what was donated.
Finally, seniors should consider which monthly bills they can reduce or eliminate. Land lines, premium cable channels and pricey cell phone plans can often be altered or abandoned