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Downsizing or Rightsizing: Finding the Right Fit for Your Future

Downsizing or Rightsizing: Finding the Right Fit for Your Future

If you’re thinking about downsizing or rightsizing your home prior to retirement, you’re not alone. This decision is not just about reducing space – it’s a significant financial decision that can benefit your lifestyle and financial health and many people are choosing to adjust their living spaces as they approach this new chapter in their lives. Learn more about the process of downsizing or rightsizing and how it can help you as you approach retirement.

Assessing Your Living Space

As homeowners age and children begin to move out, it’s common for individuals to assess their homes, finding that they primarily live in just three rooms: the family room, the bedroom, and the kitchen. Housing expenses can constitute a significant portion of a person’s budget in retirement. Naturally, many look to reduce their home size as a way to cut these expenses. However, it’s important to remember that reducing the size of your home doesn’t always equate to reducing your budget. 

Financial Planning: Pre- and Post-Downsizing

Before taking the leap to downsize, it’s crucial to complete both a pre-downsizing budget and a post-downsizing budget with your financial advisor. This will give you a clear picture of your financial situation and help you understand the potential impact on your finances. Additionally, when selling your home, be aware of the potential capital gains tax implications. Fortunately, couples can exclude up to $500,000 of capital gains from the sale of their primary residence. You might also reinvest what you owe into a new permanent home. 

Personal Considerations

While the financial benefits of downsizing are important, they are not the only factors to consider. Many people also think about the proximity to family, a warmer climate, or being closer to friends, all of which can significantly influence your decision. It is also essential to recognize that downsizing your home can impact your estate planning goal, retirement goals, and other financial situations in your life. Sit down with your financial advisor to see how downsizing would impact all areas of your financial plan before making a final decision. 

Consulting with Trusted Advisors

At Blakely Financial, we suggest contacting your most trusted advisors to discuss this important decision. They can provide you with clarity, insight, and guidance tailored to your unique situation. Everyone’s circumstances are different, and having the best information possible is key to making an informed choice.

Downsizing or rightsizing your home is a significant decision that can shape your future in many different ways. By considering all factors and seeking professional advice, you can make a choice that supports your financial well-being and personal happiness. Still on the fence? Contact Blakely Financial today to get started. 


Blakely Financial, Inc. is an independent financial planning and investment management firm that provides clarity, insight, and guidance to help our clients attain their financial goals. Engage with the entire Blakely Financial team at WWW.BLAKELYFINANCIAL.COM  to see what other financial tips we can provide towards your financial well-being.
Commonwealth Financial Network® or Blakely Financial does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.