Can Big House a threat for your retirement planning?
Sometimes big house can become burden in your retirement plan
Every one of us would like to own a large home with all the facilities. But have we ever thought of the troubles which will come our way at the time of retirement? Having a large home will need more furniture, furnishings and maintenance charges. It consumes a large amount of electricity and water.
What is budgeting?
There are innumerable repairs which will have to be done if we own a large home. Henceforth managing all these expenses after retirement will become a very demanding task. Let us throw some light on few of the expenses which are incurred on the basis of a larger home.
Maintenance charges: The maintenance charges are based on the square feet space. The expenses will be based on the number of amenities and the locality in which the property is situated. If you have a society, in that case you will have to pay the maintenance charges to the society every month.- Property tax: Every property regardless of the size and shape is incurred to pay the property tax. While paying the property tax, various factors like the age of the building, amenities, location of the building and the value of the property are considered. The larger the property in size more will be the property tax and paying this tax becomes quite difficult during the retirement.
- Water tax: The water tax has to be paid just like the property tax to the municipality. This is again based on the rateable value of the property.
Insurance charges: Another larger amount of expenses are the insurance charges for your property. In order to protect your home, the home insurance facilities cover all the costs of your personal property as well. The personal property can consist of furniture, gadgets, electrical equipment, jewellery, décor and so on. In general you will have to give the count of all the appliances including every asset in your home to the insurance company along with the year of purchase and its price. Based on all these factors the insurance company decides the premium amount. Perhaps you will have to pay an increased premium for the amount of personal property in your home. In many cases if the home is too big it is also filled in with an array of appliances and many other gadgets. In such instances, it becomes very difficult for a retired person to pay the premium.
Henceforth people having a bigger home should set aside a huge sum based on the size of their property for its maintenance.
What can be done to avoid the extra expenses on maintaining a bigger property?
Sell your big home: It is one good option to get rid of all the problems associated with the big home and have some financial liquidity as well. Now, if you have decided to go for a downsized property the first thing you need to do is to emotionally prepare yourself to leave your big home behind and go in for a smaller one. You must keep in mind that you are comfortable with the new place and its location.
Rent your big house: Other than abandoning your home you can also rent your large home to escape the mounting expenses. Since there is an increased demand for rental properties in India, renting your property will be a great option. Doing this will split your expenses.
