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Consider these 3 pros and cons.

While nearly half of Canadian homeowners don’t plan to sell their homes when they retire, 34 per cent are still unsure what they’ll do, according to a BMO Retirement Institute report.

Moving to a new city or downsizing to a more compact home can offer advantages, but depending on your goals, a few disadvantages as well. If you’re thinking about a post-retirement move, consider these pros and cons before you start packing:

When you relocate to a new city or property…

    • PRO: Save money on daily expenses: If you relocate to a less expensive area, you’ll be able to stretch your retirement savings further. Consider the benefits of a suburb vs. city, and look to exotic areas that provide a lower cost of living. Need a little inspiration? Mexico, Panama, and Costa Rica are popular post-retirement spots for Canadians, according to the Huffington Post. Or, look to Buenos Aires, Argentina, where you can rent a one-bedroom apartment (in a good area!) for only $400 a month
    • CON: Spend money on moving costs: Even if you’re exchanging your current digs for a less expensive property, moving isn’t cheap — real estate agent expenses, land transfer tax and moving costs can dissolve a big chunk of money. In Toronto, for example, the Financial Post estimates land transfer costs, legal fees and moving expenses alone would equal more than $18,000. Plus, you’ll have to consider the cost of traveling to visit family, but if you pick a tropical locale, Canadian relatives may be more likely to come to you.

When you downsize to a condo or rental unit…

    • PRO: Save time with maintenance help: Tired of shoveling snow and cutting grass? Move into an apartment building, condo or townhome. Many building owners will take care of property maintenance for a monthly fee. A significant number of homeowners over 65 choose to sell their homes, preferring to rent instead. According to the Canadian Mortgage and Housing Corporation, 78 per cent of those 55 to 64 own property compared to only 68 per cent of those 75 and older.
    • CON: Spend time to downsize belongings: Condensing decades worth of personal belongings, furniture and other items isn’t easy — one possible reason a recent Royal LePage Real Estate survey found that nearly half (43 per cent) of Baby Boomers who want to move don’t want to switch to a smaller home. Of course, if you declutter now, you’ll have less to clean and organize during retirement (and you’ll make a pretty penny from a massive yard sale).

When you downsize to a condo or rental unit…

    • PRO: Increase your available funds: A BMO Private Banking study found that the average Canadian thinks they need $908,000 for a decent retirement. By selling your home, buying a less expensive one with the profits, and then investing the leftover cash, you can boost your post-retirement financial status. Downsizing to a smaller, less costly home may even help you retire earlier by increasing your amount of available funds. (To estimate how much you’ll need to live comfortably, use this guide by the Financial Consumer Agency of Canada.)
    • CON: Decrease your available equity: If you stay put, your home equity could potentially provide a back-up plan should you (knock on wood) run out of savings, says MoneySense. You could borrow against the equity you’ve built in your home with a home equity line of credit — just be sure you can make your monthly loan payments. Equity could also help fund a retirement home stay, where monthly fees range from $1,453 to $3,204 a month, according to Comfort Life.

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