Your needs and personal situation has changed, and you decide, you will be better served, by selling your present home, and downsizing, to a more appropriate one, at this point in time. Although this often becomes an extremely emotional period for many homeowners, it should be done, only with your eyes – wide – open, and with a responsible personal plan, which ensures you don’t regret your decision. One of the most challenging decisions, which many procrastinate, considering, is from the perspective of personal financial planning, and deciding, what to do, with the proceeds, or difference between what you sold your present home for, and the acquisition cost of your new house. With that in mind, this article will attempt to briefly, review, consider and discuss, some options and a somewhat, wise approach and/ or plan.
1. Ease of mind: If your move coincides with retirement, your decision should first consider, the best way, to proceed, so you are comfortable and, at ease. Determine what you believe you will need monthly, and then add 15 to 20%, to that number. Subtract what you receive from Social Security, and pensions, etc. If you still need monthly stipends, consider putting a sufficient amount into a relatively safe investment vehicle, such as a balanced mutual fund, etc. If possible, put an additional 10% into this vehicle.
2. No such thing as, one – size- fits- all: Pay close attention to your personal comfort zone, because if you are uncomfortable, it is not your best choice. Consider your age, sources of income, nest – egg, etc.
3. Should I invest? Probably yes, but carefully interview potential advisers, and get recommendations, consider how you relate, and if you trust him. For most, avoid speculation, unless you can afford to lose that money. Publications such as Morningstar, are generally, valuable resources, and sources of reliable information. Most are best served, by using mutual funds, with a track record of doing comparatively well, in various market conditions. However, if you will panic, avoid this approach.
4. Be an educated consumer: Avoid acting rashly, and enhance your knowledge and financial understanding. It is generally, wise, to under – estimate income, and over – estimate expenses.
5. Plan ahead: Prepare for contingencies, and create separate accounts for reserve funds, for repairs, renovations and unexpected scenarios.
Plan wisely and your Golden Years, will be better, for you and your needs. Will you have the patience, planning and discipline, to ease your transformation?