Dear David,
My spouse and I are recently retired and ready to start traveling. We live in a two-storey house that we bought 30 years ago, but would love to downsize to a bungalow and have a few hundred thousand dollars left to finance our adventures for the next 10 or 15 years. We love KW, but it seems like we have to drive almost an hour out of town to find a bungalow in our price range. Are there any other options? – LEAVING ON A JET PLANE
DEAR LEAVING: After working a lifetime to enjoy this level of freedom, you could be embarking on one of the most exciting chapters of your life. I often tell clients that retirement is a lot like being a teenager again, but with decades of wisdom on your side and a very large allowance.
One of the challenges you’re going to face is moving from a two-storey to a bungalow. Locally, “ranch style” bungalows are typically scarce compared to two-storey homes. These models tend to be built less frequently because they need a larger footprint to achieve the same square footage as a multi-level home.
Many people argue that the price of homes is skyrocketing, but it’s actually the cost of the land they sit on that’s behind much of the increase. If you were to build a house in Kitchener-Waterloo and an identical house in Chatham, Ontario, the cost of materials in both cases would be about the same. But because building lots in Chatham are less expensive, the cost of building a house there ends up being much less.
Due to the scarcity of bungalows in KW and our overall higher prices, the act of “downsizing” to a bungalow often ends up being more of a lateral move. If you’re looking at using the sale of your home to fund the next decade (or more) of travel adventures, I would definitely consider some other scenarios. One option, as you point out, is to head to a smaller centre outside of KW. Because you’re retired and no longer have to juggle a work schedule and daily commute, you have a bit more time to travel if needed. With this in mind, driving a little to save a lot is a choice that many of today’s retirees are making. Alternatively, you may want to consider a condominium, as it does give you the freedom to hop on a plane without worrying about who will cut the grass or shovel snow in your absence.
This is a great time to sit down and draft a plan, year by year, to help you envision what your next chapter might look like. We all hope to remain healthy decades into retirement, but from a purely practical perspective, consider how long you will reasonably be able to secure traveler’s health insurance. Rather than trying to map out your full retirement plan, take it five years at a time and reassess as you go.
PRO TIP: A wise friend of mine recently said “we know how much money we have, we just don’t know how much time we have.” By making smart financial choices and remaining flexible, you’ll be able to make the most of the freedom you have today. #Advice #AskDavid #TheNegotiator
David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Call or text today for your free home evaluation! 519-577-1212.
