Spring is often the time of year when people begin thinking about making changes at home. Warmer weather and a fresh start can make downsizing or selling a primary residence feel like a natural next step. For many Canadians approaching retirement, the idea of selling the family home and unlocking equity to support future plans can seem like a straightforward financial move.
While this is a common experience for many, it is not always the right way to go for some. We recently came across an article from Wealth Professional Canada titled “The Great Canadian Downsize Dilemma,” and we thought it raised some interesting points wroth sharing with our clients and our community.
This article highlights that downsizing is not always as simple as it sounds. While people often expect to free up a large amount of capital, costs like moving, purchasing a new property, or lifestyle expenses can quickly reduce the amount of available equity. In some cases, homeowners find they are simply moving equity from one property to the next, instead of significantly increasing their available retirement income.
What we appreciated most about the article is its reminder to look at the big picture. Decisions like downsizing are often connected to larger life goals, including retirement timing, travel plans, helping children with housing, or simply wanting a lifestyle change. Each of these factors can play an important role in determining whether downsizing truly makes sense.
If downsizing is on your mind this season, it may be the perfect time to sit down with your advisor and review your financial life plan. At BlueRock Wealth Management, we believe big decisions should always be evaluated within the context of your overall financial plan, your goals, and the lifestyle you hope to enjoy in the coming years.