If you’re close to retirement and have a lot of equity locked up in your home, consider downsizing as a means of supplementing your savings and reducing your overhead. The cost to maintain a large home in your later years can often be very high with increasing utilities, homeowners insurance, and property taxes so it might make sense to move into a smaller home with a more manageable space. A side benefit of downsizing is that you might be able to recapture the equity you’ve built up and put it into your savings to help combat outliving your nest egg.
When downsizing, consider renting rather than owning. In addition to lowering most of your recurring monthly costs, this puts the risk of repairs and maintenance on your landlord and not yourself. If something catastrophic happens, such as a pipe burst or electrical short, the landlord foots the bill. It’s a great way to offset that risk.
Finally, in downsizing, considering moving to an area with a lower cost of living. Consider one of the top 5 best places to retire as they are retiree friendly both financially and lifestyle-wise.