Emotional
Change is hard and a major housing change may be one of the most difficult transitions to manage. For many, they don't simply have a house, they have a home. It is comfortable to them. They are familiar with their surroundings and their neighbors. It is not easy to leave the home where one raised their children.

These days family is spread all over the country or even the world. A move of any significant distance means a change to the act of visiting or being visited. It is amazing to me how emotionally affected people can be about this.

Practical
When a move is contemplated, several practical considerations need to be made. In fact, sometimes it is the practical elements that are the catalyst to starting the discussion about a move in the first place.

As people age, their needs change. Most people can imagine that if they were to develop say a bum hip, navigating stairs, mowing the lawn, and general upkeep may become problematic. Most also have experience with a family member, neighbor or friend who has been robbed or been the victim of a scam because of cognitive decline. Documents like powers of attorney can help keep funds safer, but moving can also reduce or eliminate many physical and mental impairment safety issues.

Unfortunately, moving can create other issues. The issue of location has other implications beyond local tax rates. How far does the client want to be driving to get to friends, social events, their doctor, hospital, or to other professionals and service providers? If the answer is “not far” moving out into the country or a cabin in the mountains may not be a good choice, even if cheaper. How many more years does a client even expect to be able to drive?

There are always exceptions of course, but generally I found that younger retirees and those approaching retirement are most concerned about access to family members and the practical and financial implications of downsizing. In most cases, the idea of living closer to children and especially grandchildren is quite appealing to retirees. I encourage clients attracted to that idea to discuss it with their children. Some kids love the idea, but others are not as enthusiastic.

There is a difference between grandma and grandpa visiting and grandma and grandpa being neighbors. Also, often because of work-related issues, kids are simply not confident that they will continue to live where they are and would hate to have their parents uproot themselves unnecessarily.

My oldest just started college, so our nest is starting to empty. I am nowhere near ready to retire, yet my wife and I are already discussing whether or not to downsize. Without our kids in the home, we have too much space and property that needs our attention. The practical issues dominate our concerns.

In theory, downsizing can reduce expenses, but that may not be the case. Smaller homes can be expensive, too. I’ve seen more than a few couples buy a smaller place with nicer finishing and features. That resulted in some reduction in utilities and maintenance costs, but no freeing of equity or reduction in taxes and insurance.