Remember that minimalist trend from a few years ago? The one where you were encouraged to send anything that didn\u2019t \u201cspark joy\u201d to the junkyard or thrift store? It may have seemed like just another lifestyle craze, but it turns out, downsizing is actually sound financial advice for anyone looking to retire.<\/p>\n<\/p>\n
For You: Here\u2019s Why You Might Want To Invest Your Retirement Savings in a Roth 401(k)<\/a><\/strong><\/p>\n Learn About: 3 Advanced Investing Moves Experts Use To Minimize Taxes and Help Boost Returns<\/a><\/strong><\/p>\n It\u2019s understandable that someone well into retirement wouldn\u2019t want to rattle around in a big house or keep overspending. Still, there are also good reasons for people years away from retirement to start downsizing now \u2014 whether that means adjusting their living spaces, spending habits or portfolios.<\/p>\n GOBankingRates talked to several experts about the benefits of getting a head start on downsizing for a retirement that truly \u201csparks joy.\u201d<\/p>\n According to Drew Lunt, founder and advisor at Scratch Capital<\/a>, downsizing your spending before you retire can be one of the best things you do for yourself.<\/p>\n \u201cThe ideal time to test it is a few years before retiring \u2014 that way you can make sure the lifestyle changes are realistic before turning off your income stream,\u201d he said.<\/p>\n He adds that learning to adjust your expenses during periods of prolonged adversity can help prepare you for long-term financial success. You\u2019ll know how to avoid putting unnecessary stress on your portfolio and allow your investments time to recover.<\/p>\n \u201cThere\u2019s also a big peace-of-mind benefit. Clients with lower fixed costs are often far less anxious during downturns,\u201d he said. \u201cThey know they can dial back spending quickly if needed \u2014 and just as easily turn it back up when times are good.\u201d<\/p>\n Read Next: I Help People Retire Every Day \u2014 Here\u2019s the Most Common Retirement Mistake People Make<\/a><\/strong><\/p>\n When Leslie H. Tayne, Esq., finance and debt expert and founder of Tayne Law Group<\/a>, describes a comprehensive downsizing strategy, it touches on everything from your home to your car to your lifestyle. Getting all the pieces in place can take time \u2014 and simultaneously help you save money to funnel back into your retirement.<\/p>\n For starters, you can move to a smaller home in a more affordable community to save on your mortgage or rent, property taxes and utilities. In the garage, you could switch to a car with lower monthly payments and insurance costs \u2014 as well as better gas mileage. If you\u2019re partnered and able to do so, you might consider sharing a single vehicle.<\/p>\n Story Continues <\/p>\n Tayne also advises selling used home goods or yard tools you no longer use.<\/p>\n \u201cDownsizing before retirement can significantly improve your long-term financial health,\u201d she said. \u201cWhether it\u2019s reducing housing costs, driving a more affordable vehicle or cutting other expenses, simplifying your lifestyle can free up money to invest or boost your retirement savings.\u201d<\/p>\n She emphasizes that downsizing becomes increasingly important to your financial stability as you approach retirement age. Working with a trusted advisor, you can develop a personalized downsizing strategy based on your retirement goals and other factors, such as the ages of any children or dependents.<\/p>\n Though major decisions like downsizing your home or car tend to dominate retirement cost-cutting conversations, Tayne notes that smaller steps \u2014 like canceling unused subscriptions or cutting back on dining out \u2014 can also improve your cash flow and increase savings.<\/p>\n \u201cAnother helpful tip is to renegotiate variable monthly expenses like your cellphone bill,\u201d she said. \u201cMany consumers overlook this strategy, but it can lead to savings of hundreds of dollars each year.\u201d<\/p>\n These small adjustments can make a big impact: The earlier you start, the sooner you adapt to lower living expenses \u2014 and the more you can save for retirement.<\/p>\n Downsizing your home is a significant personal and financial decision \u2014 but if it\u2019s the right move for you, Tayne says it can reduce monthly expenses while unlocking home equity that can be redirected toward retirement savings or new income sources.<\/p>\n However, she cautions that the current housing market may present challenges. In high-interest-rate environments, selling may not always make financial sense, especially if you\u2019d have to buy another home at a higher rate. It\u2019s best to seek insights from financial advisors and trusted real estate agents before making a major move.<\/p>\n Selling your home isn\u2019t the only way to earn money from downsizing.<\/p>\n \u201cAnother option to help free up funds in retirement using a home you own would be renting the home or considering short-term rental companies, such as Airbnb and Vrbo \u2014 if you have extra space,\u201d she said.<\/p>\n As Grant Meyer, CFP, BFA, certified grief educator and founder of TruMix Advisors<\/a>, explains, some benefits of downsizing your home are more obvious than others. Smaller homes are easier to clean. Moving into a condo or townhome typically means less upkeep. Communities with homeowners associations often include lawn care and snow removal.<\/p>\n These changes can help reduce physical strain and minimize the risk of injuries that could affect your quality of life in retirement. When working with clients concerned about aging in place, Meyer advises looking for ADA-compliant homes with features like wider doors and hallways.<\/p>\n Meyer also encourages exploring 55-plus communities.<\/p>\n \u201cDownsizing can also offer emotional and social benefits. Many of our clients enjoy the social aspects of 55-plus communities,\u201d he said. \u201cThere is research that suggests a strong community can be better for health and longevity.\u201d<\/p>\n The key to a healthier, happier and more financially stable retirement might just be thinking small \u2014 as in downsizing. Whether you\u2019re moving to a smaller home or cutting unnecessary subscriptions, talk to a trusted financial advisor to create a strategy that works for you.<\/p>\n This article is part of GOBankingRates\u2019\u00a0Top 100 Money Experts<\/strong>\u00a0series, where we spotlight expert answers to the biggest financial questions Americans are asking. Have a question of your own?\u00a0Share it on our hub<\/a><\/strong>\u00a0\u2014 and you\u2019ll be entered for a chance to win $500.<\/p>\n More From GoBankingRates<\/strong><\/p>\n This article originally appeared on GOBankingRates.com<\/a>: 5 Reasons You Should Downsize Well Before You Retire<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Remember that minimalist trend from a few years ago? The one where you were encouraged to send anything…\n","protected":false},"author":3,"featured_media":290808,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,149158,255,700,696,129719,67,132,68],"class_list":{"0":"post-290807","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-leslie-h-tayne","10":"tag-personal-finance","11":"tag-retirement","12":"tag-retirement-savings","13":"tag-sound-financial-advice","14":"tag-united-states","15":"tag-unitedstates","16":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115347507775408952","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/290807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=290807"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/290807\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/290808"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=290807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=290807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=290807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}