If you’re entering into the golden years and considering downsizing, you’re not alone. According to research from Bankrate, a projected 10 million retirees will downsize over the next decade. Deciding to join the movement by living out your golden years worry-free and ready to enjoy the next adventure is the easy part. The challenging part is figuring out how to start and take control of your future.
1. Take an Honest Look at Your Finances
Before you start downsizing your lifestyle, take an honest look at your finances to determine what you can actually afford and how to move forward. You may need smaller accommodations than you expected, requiring more decluttering. Or you can get creative and decide to live in a less-expensive area. Remember to account for:
- Social security benefits
- Pensions and other retirement funds
- Medical expenses
- Unexpected care during an illness, like a nurse or assisted living home
- Emergency fund
- Any outstanding debt, like credit card bills
Once you know exactly where you finances stand, you can create a realistic plan for living out your golden years.
2. Secure a Life Insurance Policy
Finances require more than a robust savings and investment strategy, but a way to offer some protection for your family. Some seniors may think they don’t need life insurance; however, it can provide family peace of mind when they need it most. A USAA policy, for instance, can replace a loss of income, burial expenses, debt and offer financial stability for your loved ones.
3. Choose Your Future Accommodations
Downsizing may be as simple as choosing a smaller home. Or it could mean moving into an upscale assisted living home with your closest friends, an RV to travel the country or a quiet cabin on the lake. Whatever you choose, make sure your finances reflect your new lifestyle and belongings. You’ll need to get serious about decluttering and let go of items you’ve collected over the years.
4. Create a System for Decluttering and Letting Go
Decluttering and letting go of items is often the most challenging part of downsizing for your golden years. Rally friends and family for support, or hire a professional organizer to keep you on track. The first step is creating a system for decluttering and letting go by categorizing each item. Try designating piles accordingly:
- Offer to friends and family
- Donate the items
- Sell the belongings and put the money into savings
- Throw away
Decluttering without a structure will likely derail your efforts. Sticking to your system can help reduce the sentimentality and attachment to let go and move forward with your plans successfully.
5. Consider Your Health
Creating a worry-free lifestyle includes considering your health and long-term medical needs. A recurring issue with diabetes or congestive heart failure could require care beyond an assisted living facility. Make sure your expenses and health insurance align with your long term medical needs.
6. Reignite Your Hobbies
There’s more to living a worry-free lifestyle than finances, decluttering and medical care. Now is the time to reignite your hobbies and old passions. Allocate some of your new space and funds to pursue painting, cooking or entertaining. Your golden years are also the ideal time to dive into interests you’ve never had time to embrace.
A worry-free retirement should embrace a financially sound and healthy mindset. Take a proactive approach and align your expenses, life insurance, accommodations, and decluttering to your new lifestyle.