In preparation for retirement, people often downsize.
The goal could be to save money on property taxes, home maintenance, travel, luxuries, hobbies, and many other expenses. Or it could be to simplify your lifestyle and free up some time.
If you’re thinking about downsizing, take your time before you do it. Otherwise, you might end up getting rid of something you’ll regret later.
Here’s something people often regret: downsizing in retirement.
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Home or living space
One of the first things that comes to mind when you hear the word “downsizing” is probably selling your home for a smaller one. A smaller home has fewer expenses – especially property taxes and insurance – and requires less maintenance and cleaning.
However, you shouldn’t necessarily make your decision based on cost alone. Other factors can also affect your quality of life in retirement.
“This may sound obvious, but the biggest regret I hear from clients who are downsizing is lack of space,” said Bob Peterson, senior wealth advisor at Crescent Grove Advisors. “This can manifest itself in a number of ways… lack of dedicated space/privacy in one’s own home, lack of space for hobbies/personal projects, and loss of functionality (e.g., moving from a separate home office to a new home office/guest room/storage room/craft room!).”
Before you give up your home, make sure your new home still has everything you want and need.
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Personal belongings
Many retirees part with sentimental items, such as family heirlooms or other meaningful possessions, to declutter. It’s not necessarily a bad idea to throw away a few duplicate photos or broken pieces that are no longer important to you.
However, if you part with too much, you may end up regretting it, especially if your decision was based primarily on your finances.
“In personal financial planning, far too much time is spent on purely financial goals rather than balancing financial and psychological goals,” Peterson said.
Downsizing for purely financial reasons can have a significant impact on your emotional well-being—especially if it means selling, donating, or throwing away things that don’t add monetary value to your life.
This is also a common problem among retirees who move to a smaller home during retirement.
“Moving into a smaller home means sorting and reorganizing things. Keeping only a selection that fits the new space means getting rid of many pieces of furniture that you once loved,” says Brenda Scott, owner of Tidy My Space and a professional organizer who specializes in helping seniors move into smaller homes.
“Many customers are sad and often angry because they saved up for a long time to buy the items and they had a lot of value to them,” Scott continued. “Then when they realize they bought thousands of dollars worth of solid wood furniture and they might only get $50 when they sell it online, it hurts their pride and they feel like people are disrespecting them.”
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Social aspects or obligations
“In my conversations with (my clients), I’ve noticed that they regret having reduced their social circles and commitments too drastically,” said True Tamplin, CEPF and founder of Finance Strategists.
“In anticipation of a quieter life, some retirees limit their memberships or social activities,” Tamplin continued. “Later, they may feel isolated or miss the community and connections these activities provided. In fact, maintaining a broader social network can enrich retirement far more than the time and money saved by doing without.”
Location
Many retirees move when they retire. Some want to be closer to their children or grandchildren or to have better healthcare. Others want a lower cost of living.
Whatever the reason, if you’re not ready to move, moving can be fraught with regret. Selling your home can not only be traumatic, but it could mean severing ties with the community you’ve built for yourself.
That’s why it’s important to consider not only the financial or practical aspects of a move, but also the emotional ones.
“If your new home is far from where you are selling, what about your community? Can you continue to maintain the relationships with friends and neighbors you have built over the years?” said Jim Davis, CFP and senior wealth advisor at Aspen Wealth Management.
“Maintaining social connections is an essential part of a satisfying retirement lifestyle,” he continued. “Before moving into a new home, consider whether it will support this important aspect of your life.”
Outdoor area
Do you own a home with a decent-sized lot? If so, ask yourself if you’re OK with giving up the outdoor space and converting it into something smaller or more manageable.
Many apartments and smaller homes don’t have room for a private yard or garden, so if you’d like to have one, you might regret losing that space later.
Read more: 5 reasons why retirees regret selling their home in retirement
Independent living space
If you’re thinking about moving into a senior living community or shared living facility, make sure it’s what you really want—and need. A smaller home, more convenient amenities, or personalized care might make your life easier. But you’re also giving up a certain amount of independence and privacy.
“When you live in a detached home, you typically have a buffer between your neighbors that you may not fully appreciate,” Peterson said. “If your new home is on a smaller lot, in a planned community, or in a condo/townhouse, you suddenly have a whole new set of neighbors that you may not want.”
Shared housing can be even more overwhelming if you’re used to having a lot more privacy. This is especially true in smaller or densely populated communities with lots of common areas.
Travel and other hobbies
Retirement is usually when people have the most time to travel or pursue other hobbies and interests. However, if you reduce your budget for these things or eliminate them altogether, you’ll miss out on many potential opportunities – and you may regret it.
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This article originally appeared on GOBankingRates.com: 7 Things You’ll Regret in Retirement If You Downsize
