Retirees might dream of selling their home, downsizing to a smaller one, and investing the extra cash for income, but the profit they pocket is often less than what they hoped for.
When you retire, you may hear a lot about downsizing — trading in your large house for something more compact. It’s often pitched as the best move for retirees, but it’s not for everyone, and you may not have the cash or the desire to go smaller. The idea may have even crossed your mind, but there are some myths and misconceptions about downsizing — especially how it may affect your finances or change your lifestyle. If it feels like the right fit for you, though, downsizing can be a practical way to ease into retirement.
But before packing up your belongings, avoid falling for false narratives, such as that selling will provide a significant financial gain or that your living expenses will be greatly reduced by downsizing. Instead, approach your retirement planning with a clear understanding of reality and steer clear of these 5 myths.