If your clients are thinking about downsizing to save money, they might be disappointed by unforeseen costs and sacrifices.
According to an Ipsos survey commissioned by HomeEquity Bank, 31% of homeowners say they need to access home equity to live comfortably in retirement, but costs associated with downsizing were more than expected for 27% of those who had gone through the process.
Those costs include resources to maintain relationships in old neighborhoods, build new ones and navigate life in a new setting, said Yvonne Ziomecki, HomeEquity Bank’s executive vice-president of marketing, in a release.
In addition to financial costs, there are personal and emotional ones.
“Moving into a smaller house or adjusting to a condo or apartment setting means coping with the harsh reality of selling or giving away some belongings and sacrificing personal comforts when space becomes limited,” said Ziomecki.
These costs are sometimes unforeseen. For example, only 34% of respondents indicated they planned to move to a new city or town when they downsized, but half (50%) ended up buying a smaller home outside their current communities and networks. That number is even higher for those aged 55-64, at 59%, and those aged 65-74, at 57%.
Still, 88% of those who downsized say they’re ultimately pleased with their decision.
About half of Canadians will be faced with downsizing. The survey finds that 48% of Canadian homeowners aged 55 and older have no plans to downsize. Within this group, 93% say they’re happy with their current living arrangements.
About the survey: HomeEquity Bank reached out to more than 2,500 older adults in Canada (aged 55+), among whom 1,870 were homeowners, the week of Aug. 27, 2018, through an omnibus survey completed by IPSOS.