When you are coming up to retirement it is only natural that you will start to consider not only the change in your day to day life but also the change in your income and how this might affect you. For this reason many people think about the option to downsize their homes when they retire. Lets take a look at what downsizing means and the benefits that this might bring to you in retirement

What should I do with my home when I retire?

The hope of most people is that when they retire, they will have managed to finish paying off a mortgage on their property so that they no longer have such a large outgoing on a monthly basis. Even if you have a good personal pension plan you may feel that there is a gap in your income. Selling your home, particularly if it is in a desirable area and has increased significantly in value, can be a good way of finding additional funds to help with retirement. 

Downsizing to a smaller property not only means that you may be able to buy it outright with funds from your home sale, and with money to spare, but can also mean lower maintenance costs and bills. A smaller property is likely to have a smaller council tax bill and also be cheaper to heat. Downsizing can also offer you the opportunity to move closer to loved ones which may be handy as you get older. 

Can I still retire abroad? 

It is still possible to retire abroad, and this is something that over 1 million brits have currently chosen to do. There are some things that you will need to consider if this is what you want to do so it may be a good idea to speak to a financial advisor to check that this is a move you can fund properly. You can transfer your state pension abroad by contacting the International Pension Centre, however if you are in receipt of pension credit this will stop if you move abroad permanently. 

What if I need to pay for care?

If at some point in the future you need to pay for care, then it is understandable that you will have questions regarding your property. It is important to remember that not all care options require you to move into a care home. Care at home is an increasingly popular choice that many people are choosing. It allows them to stay in their home but receive the care that is needed. If you downsize when you retire, you can still opt for care at home.

If you do need to move into a care home then there are ways in which you can protect your home against the need to sell it and a financial advisor will be able to take a look at this for you, they include options like equity release and care annuities. 

There are also different limitations on how much you can have in savings before you will need to pay for your care and how this might impact owning property, so it is always wise to seek advice.