The property taxes and expenses incurred by maintaining your current primary residence continue to accrue and reduce the amount available for your retirement income. Even if you have paid down your mortgage monthly operational expenses continue.
Because of these ongoing fixed costs, those who haven’t saved enough to retire comfortably should consider downsizing to a smaller home with more manageable maintenance expenses.
How much would the potential savings be?
Annual property taxes nationwide average about 1% of a home’s value and annual maintenance and utility bills average from 1% to 3%. Thus annual expenses on a $500,000 house alone are approximately $15,000 a year. Downsizing to a $350,000 home and that figure drops to $10,500.
Of course, where you decide to relocate, as well as the size of your new home, will determine the amount of your savings.