I am currently on holiday enjoying our house swap on the east coast of Canada. The setting is breath-taking: a house on the water and minutes away from numerous beautiful beaches. Inhaling the salt water air and indulging in fresh seafood for dinner every evening seems almost mythical to a city-dweller. So, what is the cost of this luxury? Surprisingly, the price tag on the home we are in is a lot less than one would expect. Turns out this five-bedroom house with ocean view cost one third of a smaller one in downtown Ottawa.
As I began chatting with some of the locals, I realized that many were originally from bigger cities and had moved to enjoy the slower pace of maritime living, but also to reap the financial benefits of the exodus. The economic downturn in recent years translated to lost stock value and smaller nest eggs for many who had originally planned to retire comfortably at home. Given their options, they chose to sell their big house in the city and move to a smaller town.
Considering that real estate is often a relatively safe investment, it is no surprise that these retirees chose to sell their home to increase their savings. Imagine your downtown property sells for $650,000 and you buy one for $250,000 on the coast instead. That means you have $400,000 to invest as you see fit and enjoy retirement – not a bad use of capital if you ask me!
Of course, various pros and cons must be weighed before coming to any sort of conclusion. On the one hand, the financial advantages speak for themselves, as well as the lifestyle pace and the view. On the other hand, if you have family (especially grandchildren) living nearby, it makes moving a difficult decision. Not only will you see your friends and family less, you will also spend more time and money travelling back and forth to visit the lot of them on a regular basis. Having said this, not seeing family regularly may seem like a pro rather than a con for some.
For many, the matter of uprooting their entire life and risking the feeling of isolation and boredom once away from familiarity may be enough to sway the vote to stay put. For others, the lure of extra money to use towards enjoying the prime of their life will be enough to convince them to go.
How about you? Would you move to enjoy financial freedom in retirement?