You've sold your practice and now you're trying to figure out what your next step will be. Have you considered downsizing? When you hear the word "downsizing" your mind may automatically jump to thoughts of your house. However, downsizing can apply to a wide range of topics that are relevant as you head into retirement. Downsizing is really just another word for simplifying or streamlining your life, and your house is only one part of that equation. Consider these four factors in terms of your own retirement goals:
- Your House - Yes, the house is a major part of your future planning, so this is where we'll start. Do you plan on traveling? How about entertaining many guests or having one of your children move back home? If you don't plan on having a lot of people in your house, or if you plan on being away from home a significant amount of your time, then it might make sense to downsize to a smaller house. Many people choose to downsize so that they will have less cleaning and maintenance to do day-to-day, and will have more time to enjoy the space worry-free. Sometimes even downsizing to a condo or other community gives you access to common amenities while minimizing your personal responsibilities.
- Your Stuff - Over decades of working you have amassed a large quantity of belongings. Some of them have personal connections, but others can be let go without much grief. As you begin your new life as a retiree, now is a good time to do a major spring cleaning. Donate items that you simply don't need or use, and get rid of all those extra work clothes that you won't be wearing anymore. Reducing clutter in your home is an important step in downsizing, but it also gives you a good opportunity to get a tax write off for charitable donations during your first year of retirement.
- Your Car - In the past you may have had a daily commuter vehicle and a weekend vehicle, or a spare vehicle just in case. If you're making payments on multiple vehicles, now is a good time to see if you can downsize. Either sell a spare car, or pay it off completely so your ongoing expenses are minimized. The longer you keep making payments the longer those vehicles are cutting into your retirement income. Plus, you can drop your insurance down after the vehicles are paid off.
- Your Technology - You've spent years answering every phone call, text, page, and email. Today is the day when you can set your own schedule. Give yourself some breathing room by downsizing your phone bill and scheduling hours during which you can answer emails. The rest of the day is yours to enjoy. You no longer have to respond right away.
Downsizing offers you more flexibility and less stress as you head into retirement, and it's not just limited to your home. There are many things you can downsize for a simpler life.
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