Top Downsizing Tips for Baby Boomers
Canadian baby boomers—those born between 1947 and 1966—are the fastest-growing segment of the Canadian population, accounting for 30%. And they’re affluent: 78% of baby boomers currently own their own homes.
In 2011, when the first round of baby boomers started to retire, an estimated five million Canadians were 65 years of age or older; by 2025, that number will rise to 20.4% of Canada’s population. And as more and more baby boomers get set to retire, many will be looking to downsize.1
Why Baby Boomers Should Sell Their Home and Downsize
There are many reasons why baby boomers might consider downsizing. One of the most cited reasons for downsizing is to stretch their retirement budget. Moving into a smaller home or condominium can significantly decrease your expenses; including utility bills, home maintenance costs, and annual property taxes.
Downsizing can also increase how much you have in your nest egg. For example, Canadians, on average, will need close to $1.0 million to retire comfortably. But three out of 10 people say they won’t be able to do this. Downsizing can certainly help achieve that goal.
The average price for a single detached home in Toronto is close to $1.0 million. If you were to move from a home with a paid-off mortgage into a $350,000 condominium, you could add $650,000 to your nest egg. That can go a long way in retirement.
If you’re a baby boomer who still has a mortgage, downsizing still makes sense. It can lower your monthly mortgage payments and taxes. On top of that, downsizing can lower the costs of heating, furnishing, and maintaining a larger home.
How Staging Can Help Downsizing Baby Boomers
Just because it’s a sellers’ market doesn’t mean you can sit back and let the offers roll in. If you want to maximize your sales price, you should consider staging your property. First impressions count. When it comes to real estate, a properly staged house can be the difference between a quick sale and the home stagnating on the market.
Proper staging doesn’t need to be expensive or entail a top to bottom revamp. Most home staging is about pinpointing issues around the home and yard and cleaning. Is it worth it? Some estimates show that home staging can add a 20% premium to the price of a home.
To get the most of out your house, follow these simple, cost-effective tips:
- Replace Hardware: Small changes can make a big difference. Replace hardware around the house; especially in the kitchen and entranceways.
- Make Rooms Bright: Scrub windows, frames, and screens. Use bright window treatments, fix broken light fixtures, and make sure to replace burnt-out bulbs.
- Paint: Just because you like bright colours doesn’t mean buyers will. An inexpensive coat of paint is an easy way to make a room feel fresh. To make buyers see the full potential of a room, use neutral colours.
- Spruce up the Yard: Don’t forget that the first thing a buyer will see when they drive up to your house is the yard. The inside might be spectacular, but some buyers might not take a look inside if they’re greeted by overgrown hedges, tall grass, bare flower beds, and dirty deck or patio furniture.
Choosing a New Home
That said, downsizing is not just about square footage; it’s about what you want out of retirement and how your needs will change as you get older. It’s important for baby boomers who are planning to downsize to understand the many benefits of trading in the space, labour, and cost of a larger home for something smaller and more manageable.
For example, are you looking forward to a maintenance-free retirement? If so, a smaller house with a big yard might be a challenge. Will sidewalks or steps leading into the house be an issue if they get icy in the winter?
What about bathrooms? Many newer construction homes in Mississauga and West Brampton have large bathrooms with walk-in showers, which are important draws for many baby boomers looking to downsize.
But downsizing is not just about the home; it’s also important for baby boomers “moving down” to think about the lifestyle they are buying. Downsizing usually goes hand-in-hand with more spare time, so make sure moving down gets you the lifestyle you want. Do you prefer an urban or rural setting? Or maybe you need to be near a picturesque lake? Are you looking forward to cutting the grass or do you prefer a maintenance-free lifestyle? Is golf, tennis, biking or another outdoor activity important? What about restaurants, shopping or cultural events? Is convenient public transit a factor? How about medical facilities?
If you’re a baby boomer and approaching or in retirement and thinking of selling your home and moving down, make sure you hire a real estate agent who understands the Mississauga and West Brampton housing market, like Russell Robson.
1. “Canadians in Context - Aging Population,” Employment and Social Development Canada web site; http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=33, last accessed November 18, 2014.
2. Leong, M., “Almost half of Boomers say they are not interested in downsizing homes,” The Financial Post, February 26, 2014; http://business.financialpost.com/2013/02/26/almost-half-of-boomers-say-they-are-not-interested-in-downsizing-homes-survey/.