Downsizing your home for retirement can be just the ticket to your golden years. Added financial security can come from a profitable sale of your current home, and more from the savings on maintenance costs for your new home. And your lifestyle can be simplified by liberating yourself from all the “stuff” we tend to accumulate by retirement age.

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1. The bigger issues

You need to look beyond just the financial numbers, however. The question of whether to downsize is more about your quality of life and less about the money. There are emotional, physical and social factors to consider if the decision means moving far away.

Meditate on (and share with your partner) what really matters at this stage of your life — fun, health, creativity, living closer to family, spirituality, intellectual stimulation, community, as well as the financial relief downsizing may offer you.

2. The potential savings

If your answer favors making a move, consider these numbers. Even if the mortgage on your house is paid off, taxes and upkeep can still cost you each year. Most annual property tax bills average about one percent of a home’s value (per the Tax Foundation) and annual maintenance bills average from one to three percent (per Freddie Mac).

So, carrying costs alone on a $500,000 home total about $15,000 a year. If you downsize and move into a $350,000 home — the figure drops to $10,500.

Another way of looking at that savings, assume you only allow yourself a four percent rate of withdrawal annually from your retirement savings. In order to cover the taxes and upkeep on your current home, your retirement nest egg has to be $375,000. To cover the taxes and upkeep on a downsized home, a retirement nest egg of $262,500 will do.

3. What’s your current home worth?

Surveys show 75 percent of would-be home sellers overestimated what their homes were worth, according to their real-estate agents. More than a third saw their home’s value at 10 to 20 percent more than the market was likely to deliver.

Consult several local real estate agents to get a fair estimate of your home’s current market value. You could also hire an independent appraiser. Lots of websites will give you information on what homes in your area have sold for recently. You can also use online estimators from major banks to determine a home’s value.

When you’re talking to the agents or appraisers, ask about inexpensive things you can do to boost your home’s selling price.

4. What will a new home cost you?

Just as people tend to be optimistic about what their homes will sell for, they’re likely to imagine that they’ll get a steal on the next place they buy. That’s unrealistic. Use the same online tools mentioned above, or our mortgage calculator below for researching recent sales prices to find what you can expect to pay for the type of home you plan to buy.

If you’re thinking of moving to a new area, however, there’s no substitute for spending some time there and visiting potential homes. Even if you’re familiar with a place from vacationing there, it could pay to visit in different seasons to make sure you’ll be happy there year-round. Even better is to move to the area and rent for a year or so.

5. What are the tax implications?

First try to determine your likely gain. That’s not just the difference between what you paid for your home and what you sold it for, but the difference between the selling price and your home’s cost basis for tax purposes. Cost basis includes what you paid initially plus any permanent improvements you made over the years.

Downsizing makes sense when the income and property taxes of where you plan to move are lower than your current location. Also look into any special tax breaks for homeowners over a certain age. The state’s tax or revenue department website is a good place to start.

6. Remember closing costs

If it’s been a long time since you bought a home, you may have forgotten all the closing costs you had to pay at the time. Those probably included legal fees, recording fees, title insurance and a long list of miscellaneous other charges.

Not only will you have to pay closing costs when you buy your next home, you’ll also be faced with a second set as a home seller. Most significantly, those can include real estate commissions as high as six percent, and sometimes higher, if you use an agent.

7. Gently letting go

Perhaps the toughest part of downsizing is having to part with those cherished treasures you’ve stored all these years and no longer have room for.

It may help to tell yourself: “You can’t take it with you.” If there are children, let them decide which of the family heirlooms they want to inherit. They then have to claim and take them by a certain date. On that date, everything left goes to an estate sale or to charity.

One space-saving hint will help preserve memories of the kids’ keepsake school projects and hobby creations. Get the kids to pose for a picture with them. Sometimes a picture is enough. You have a record of the art and the artist but not boxes of the artifacts themselves.

8. Be sure to save your savings

Remember that one of your key reasons to downsize was to get some financial relief and cushion your retirement. So, don’t spend your gains. Protect them by depositing that money into a secure savings account or fund a low-risk investment that fits into your overall retirement invest plan.

For emergencies, you can tap a home equity line of credit (HELOC) on your new house. A HELOC costs little and interest payments are tax deductible because it’s a mortgage. But HELOCs are risky because their variable interest rates can make your payments higher.

A home equity conversion mortgage may be a better option. This is the reverse mortgage approved by HUD. While the fees can be expensive, you get a lower fixed-rate than the home equity line of credit. You also get the option of borrowing only what you need, avoiding a monthly loan payment.

Your golden years can shine all the brighter if you follow these steps to downsizing your home for retirement.

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