After hitting 65, a divorced doctor in a New York City suburb began ruminating about the possible sale of the spacious Tudor where she’d raised her two children.
“With my kids grown and away, I’m rattling around in this big place, which I could sell in a flash. But the hard part is figuring out where to move next and the economics of making a move,” the doctor says. “I’m still working and traveling the world, so the notion of hunkering down in a retirement community leaves me cold, as do lots of condos. What I’d really like is a small single-family house nearby with a little garden. But there are zero such available listings in my local area,” she says.
Jeff Tucker, a senior economist for Zillow (zillow.com), doesn’t know the doctor in this true story. Yet he’s not surprised that her attempts to find housing have been frustrating.
“Home shoppers picked the shelves clean this December, leaving fewer active listings than ever before in the U.S. housing market,” says Tucker, noting that limited supply continues to push up prices.
Though the doctor is one empty nester who’s emotionally ready to list her big family home, other seniors are more ambivalent about downscaling, especially because the oversized family homes they occupy continue to gain value.
“The fact is that indecision about whether and where to move is paying off for people who are torn on selling,” says Eric Tyson, author of “Personal Finance After 50 for Dummies.”
After their children leave home, many homeowners find it emotionally difficult to let go of a property so laden with memories. He says this is a good time to take stock of your housing needs and overall financial situation, though many fail to seize that opportunity.
Cary Carbonaro, a financial planner with more than two decades of experience, says it’s not up to those in her profession to go beyond their role as advisers to clients struggling to make the right housing choices.
“Where they live is really a personal decision. I wouldn’t want to tell clients what to do,” Carbonaro says.
Here are a few housing-related pointers for empty nesters:
-- Think through the pros and cons of selling your current home.
As Carbonaro points out, some parents of children who have grown up and left home wish to hang onto the large family property because they want to take advantage of the extra space in new ways.
“They turn their kids’ rooms into fun rooms for themselves -- media rooms, hobby rooms or exercise rooms,” she says.
Nonetheless, Tyson cautions homeowners -- especially those with a sentimental streak -- against clinging to the big house with the uncertain hope that it will become the hub for many extended family gatherings.
Perhaps your children will marry and move to a distant state, coming to visit you only occasionally during summer vacations or possibly at Thanksgiving. “Do you really want to carry the costs of a house that’s too big for you just so you can entertain your kids there a few days a year?” Tyson asks.
-- Consider seeking expert financial advice.
“Most financial planners aren’t set up to deal with specific issues, such as what to do with the family house when the kids have moved away. They’re more focused on creating a comprehensive plan for allocating their clients’ investment funds,” Tyson says.
However, by going through a professional group such as the National Association of Personal Financial Planners (napfa.org), you should be able to locate a planner you can hire for just a few hours to discuss your empty-nest housing issues.
Additionally, Tyson recommends that you seek out advice through a certified public accountant who has also been trained as a Personal Financial Specialist (PFS). The American Institute of Certified Public Accountants awards this designation. You can locate a PFS in your area by visiting the group’s website: aicpa.org.
-- Include retirement planning in your housing analysis.
Obviously, many people reach the kids-are-gone stage with years left in their careers and a strong desire to continue working. But that doesn’t mean they can afford to be oblivious to their future needs for retirement income.
“A fair number of boomers have under-saved for retirement,” Tyson says.
If you’re in this category and your home has appreciated substantially, selling could open the way for investments that are potentially more lucrative.
“I’m talking about freeing up money from your current house by moving to a property that has a smaller mortgage and is less expensive to maintain,” he says.
-- Start making your housing plans sooner rather than later.
Some people appreciate the expanded freedom that comes with an empty-nest life. But others are depressed after the last child leaves.
“A lot of times people are in denial. They run away from making hard choices, such as whether to sell the big house and move,” Tyson says. He says those in a funk about their new status as empty nesters can squander several years failing to explore and consider alternatives to staying put in their current home.
“You don’t want to rush into a decision, but you shouldn’t dawdle either,” Tyson says.
(To contact Ellen James Martin, email her at firstname.lastname@example.org.)