When you come to that proverbial crossroads in life-an empty nest or retirement-it`s wise to consider scaling back your living quarters.
You may not only have too much space to take care of, you may need to cut monthly maintenance and annual tax and real estate bills. Or, you may prefer to use your newfound freedom-from work or children-to travel or pursue a hobby rather than to take care of a large house and yard. Or, your arthritis may make moving to a one-floor home essential.
No matter the reason, before you pack your belongings and head off to that cozy low-cost condo in perennial sunshine, giving careful consideration to all that such a move involves will make scaling down your living quarters easier and less stressful. It may even help you decide whether such a change is advisable.
”Just because everybody tells you that what you need for the next stage in life is to get away from your surroundings and go someplace miles away, don`t think you have to do it and do it quickly,” advises Dr. Beth Yudofsky, a Chicago psychiatrist. ”You may end up being miserable.”
Long-term happiness may demand more than having less square footage to worry about and pay for and may require deviating from the traditional migratory patterns of moving back from the suburbs to the city or from a large to a smaller home.
Instead, it requires knowing yourself and what you need to be happy in terms of surroundings, possessions, amenities and security; how you want to spend your time; whom you need around for support; whether your family situation may change (many empty nesters find the flock returns home in the event of unemployment or divorce); and what your long-term health prospects may be.
To help you decide on how best to downsize, we`ve rounded up the key factors to consider:
– Possessions. Cutting your square footage may sound practical, but you`ll have to sell or give away possessions. ”You need to be ruthless about it,” says Marge Sherman, who has fine-tuned her de-accessorizing through numerous moves. Most recently, she and her husband moved from a large condominium in Wilmette to a smaller one in Highland Park to cut living space and be closer to one daughter and their main network of friends. ”I have given away things to my children, friends and people who`ve been nice. It makes more sense than holding a garage sale, which earns you usually a fraction of what you paid.”
Sherman also advises taking into consideration changes in your lifestyle. ”If you`re not planning to entertain as much, you may not need that dining room table,” she says. ”You can also keep certain things and recover them for a fresh look, which is less costly than starting over.”
There are professional services, such as Chaos to Order and Personal Packers and Moving Consultants, both in Chicago, that can help you prune belongings. They`ll take a look at your possessions and new surroundings and advise what to keep and what to discard or sell.
The ultimate decision is up to the homeowner, says Bob Copeland of Personal Packers. ”I had one client who fought me tooth and nail, moved with twice as much as she had room for, had to store a lot and is now sifting through boxes to get rid of things. It`s not an easy process,” he says.
Costs depend on services provided. Copeland, for example, sometimes charges a flat fee, other times an hourly rate.
– Support systems. Be sure wherever you go you can maintain close personal contact with family and friends, which will depend in part on your mobility, says Yudofsky. Phone contact alone isn`t sufficient.
Nora and Daniel McRedmond are following this counsel as they plan a move from the Northwest Side bungalow they`ve lived in for 29 years to a smaller home in Niles. ”We haven`t yet bought, but it will be smaller and easier to maintain. We`re going to the suburbs so we can live closer to our daughter and her family,” says Mrs. McRedmond, who retired from Illinois Bell. Her husband retired from the CTA.
– Surroundings. Being in the heart of a city may sound appealing and allow you to walk to stores, movie theaters and restaurants after years of living in the suburbs and driving everywhere. But you need to balance that against how much you like to sit in your yard or tinker in your garden. Perhaps you`d be happier in a condo with some greenery, near a train station or elevated line so you can zip in and out.
You also need to weigh the comfort that comes with belonging to a community and knowing your butcher, cobbler and cleaner by name, says Realtor Joan Ross of Kahn Realty in Glencoe. ”It may seem trivial, but it gives you a sense of place.”
Kay Quinlan, a Realtor with ERA-Callero & Catino in Niles, moved from Niles to Mt. Prospect, 20 minutes away, but continues to shop at many of the same places because of her work. ”It wasn`t a major break,” she says.
– Healthfulness. We`re living longer, and the odds are that you may need extended care at some point, which may make your current home unsuitable. You may not be able to negotiate stairs in a two-story house or townhome or even the front walk to a ranch. Taking the elevator downstairs to a laundry room could also prove painful.
Retirement or empty-nesthood may be a good time to choose a home that will take you through later years in the worst case scenario. If illness or other infirmity so demands, it may prove a boon if you can transform a downstairs den with bath into a bedroom suite.
Quinlan decided on a first-floor two-bedroom condo in Mt. Prospect when she sold her Niles home after 30 years. ”I`m still active and working, but I decided, `Why not buy something where I can reside a long time, which is less costly (than her previous home)?` ”
– Finances. There are all sorts of financial scenarios to consider. Selling a house and moving are expensive and time-consuming.
Besides the purchase price of your new home, there usually are decorating costs and extra expenses that were totally unexpected. If you`ve lived in a house for years, you know what your monthly maintenance and yearly tax bites are and you know when the furnace and refrigerator are on their last legs.
Switch properties and there may be many unexpected costs, such as Christmas bonuses for staff and special assessments, as the owners of one Lincoln Park building keep finding. Now that the tuckpointing has been finished, they`re increasing building reserves in case an aging elevator fails. ”No matter your financial circumstances, unexpected costs are upsetting,” says Kahn Realty`s Ross. The point is to be prepared.
You might want to consider renting before you purchase. But do so for long enough to get an accurate feeling of yur new surroundings. ”Living in an area is quite different from visiting or staying a short period,” cautions Yudofsky.
Selling a house, buying or renting a less costly property and banking the difference sounds like a terrific way to sleep better at night. It can be. But before you do, consider the tax consequences. Homeowners who sell have two years to reinvest proceeds in a property before they`re taxed. One Evanston couple is taking this route as the husband gets ready to return to school for a career change, from finance to social work. They`ll live off the wife`s salary and the proceeds when they sell their home and rent while he`s a student.
If you sell a home for more than what you pay for the next one, you must pay at least a partial tax on the gain. If you`re over 55 years old and the house was your principal residence for three of the last five years, you may be eligible for the onetime lifetime exclusion of $125,000 in profit, according to the Internal Revenue Service.
While most young homeowners need mortgages and find the interest and tax deductions useful, those nearing retirement or simply at a later stage of life should think twice before they incur debt. They may have paid off their mortgage years ago and are living on smaller fixed incomes that don`t permit a big monthly outflow.
The key is to assess monthly cash flow and whether you can do better by investing the proceeds from the sale of your house and taking on a mortgage or paying all cash, says Randy Abeles, director of taxes at McGladrey & Pullen in Chicago, an accounting firm.
– Services and security. Making a switch from a home to a condo or apartment may be the time to pamper yourself in ways your single-family property never permitted. The sky`s the limit these days in terms of services available-in-house grocery stores, banks, swimming pools, parking, doormen. But be prepared for extras to show up in your monthly costs and assessments. Prioritize. One widow in her mid-60s moved from a gracious apartment in Lincoln Park with few of those amenities to a newer building off Michigan Avenue that offered a variety. ”It`s a lot of fun. I can even have dinner sent over from a nearby hotel, and I`m closer to friends.”
Sometimes the wisest choice is to stay put if that`s financially feasible. North Shore homeowners Maxine and Jules Levine, for example, toyed with moving from the house they`d lived in for 34 years because their children were grown and ”that`s what you do,” Mrs. Levine says. After weighing the pros and cons, they decided they loved their colonial and its corner lot too much to leave and instead remodeled to make the house more comfortable for later years. That doesn`t mean they`ll stay forever. ”We`re keeping our options open,” she says.
