One of the most important lifestyle changes older people face is downsizing. The term loosely refers to all those activities that focus on living more simply, getting rid of stored items you no longer need and paring the monthly budget. The good news is that the transformation need not be a chore. Instead, it can become a fun, challenging project that results in having more money to spend, fewer daily chores, and a more carefree life in general.
Step one is acquiring a more efficient, smaller home. For the vast majority of seniors who downsize, this is the trickiest proposition of all. Fortunately, there are several excellent ways to deal with finding the perfect home for your new needs. Additionally, it helps to have some extra cash on hand when moving. Selling a term life insurance policy can be a smart, fast way to accomplish that goal. There’s no sense in trying to do everything alone.Â
You’ll make a much smoother move into your new phase of life if you work with a realtor who specializes in finding small, efficient homes for seniors. It’s also an ideal time to consult a financial advisor to make sure all your retirement plans are up to date. Finally, create a fresh monthly budget that matches your downsized lifestyle. Here’s how to get started.
Get Cash for Term Insurance Policies
Want some extra cash to make downsizing easier? Think about using a life settlement to turn your term life policy into instant cash. You’ll never have to pay premiums again, sell the entire policy to a third party, and can get more than the cash value but less than the death payout amount. More seniors are using life settlements to convert term policies into the cash they need for all sorts of life necessities, including a transition to a new lifestyle after downsizing. It’s a common myth that term policies are not convertible to cash, but in nearly all situations they are if you use a life settlement to sell them to a third party who takes full ownership and pays the rest of the premiums.
Shop Wisely for a New Home
Having a home that suits you now is one of the best lifestyle changes to improve senior living and happiness. Work with a realtor who knows the downsizer market, has experience with seniors, and whom you trust. Don’t jump for the first efficiency house you tour. While the market is pretty tight right now, it’s better to take your time and find the ideal size place in a neighborhood you know is safe. View at least a dozen homes before making a decision, and let your realtor know all your preferred features and deal breakers well in advance.
Consult a Financial Advisor and Make a New Budget
You’ll need the expert advice of a licensed advisor to help you navigate IRA withdrawal requirements, tax issues on a new home purchase, and making a new budget that takes everything into account. Don’t be surprised if your downsized lifestyle costs much less to maintain than your previous one. In fact, that’s what the transition is all about: saving money and living more efficiently. Create a budget that allows for savings even though you’re likely going to be taking mandatory IRA withdrawals.
