Downsizing has become a natural progression in Western society. After living a life where “bigger is better” seems to be the order of the day, downsizing offers individuals a chance to create much needed finances and a lifestyle which perhaps is much more in line with needs and aspirations. By downsizing you can free up valuable pennies for short-term needs or more long term aspirations – securing your retirement income so it offers peace of mind and new opportunities.
Normally related directly to “property”, many people find that downsizing leads to a life where there is less stress in later life and an environment which is both comfortable and stimulating. So, let’s look a little closer at some of those benefits:
The benefits of downsizing
- The first benefit is actually gained from taking part in the process. In order to downsize you need to give your life a close assessment – and that can’t be a bad thing. Too often in life we trundle on with what is comfortable and acceptable without questioning whether we are paying too much or getting what we really need. It also means you will give your retirement serious thought and prepare for the future in an informed way.
- There is likely to be financial rewards if you are considering a smaller home or car or less expensive equipment. The money you free up can go towards short term payment of debts or treats, or further long term security by creating a retirement package which is genuinely tailored to your needs and wants.
- Our life journeys are full of milestones where our lifestyle and property needs change (getting married, having children, moving abroad etc) and they all tend to be about needing bigger and more. The latter part of our lives is more “health lead” and perhaps about needing less. Children are leaving the nest, our health is feeling the pangs of old age and expensive gadgets are perhaps not the priority they used to be. In a nutshell, we need an environment which is stimulating, accessible and comfortable. Downsizing can fill that need.
Things for consideration
- Moving home is considered one of the most stressful things you can do. If you are going to downsize – especially your home – consider the extra hassle it may bring.
- For once you are going to be cutting down instead of building up. Can you still feel valid and comfortable in a smaller world?
- If you have lived in your house for some time, then it is likely to hold lots of memories. When you move to your new home you will be leaving all of that behind you. Is this ok?
- Moving home is not just about bricks and mortar but about communities and neighbours. Unless you are staying in the same location, you will lose old communities and have to get to know new neighbours.
- Ultimately, with any downsizing project you are going to find yourself with less space. Are you going to fit all those prized and valuable possessions into your new world?
Do you want to use financial rewards to secure the perfect retirement?
As much as extra cash at your fingertips can be very exciting it is also a time to be cautious. If you are looking to put money away for your retirement, get good advice as to your options and where your pot is most likely to perform best. A regulated financial advisor keeps an expert eye on the financial market and will have contacts with all the top players. If downsizing is not the answer for you, don’t forget a regular pension check is always useful. And if you are over 55 – pension freedoms may be a way to free up some very valuable cash1.
1Accessing money from your pension (pension freedoms) is not right for everybody and could leave you worse off in retirement. Be sure to take advice from a regulated financial adviser.
If you are considering your pension, consider using a regulated pensions specialist like Portafina or, view the guides at The Pensions Advisory Service.