In this video, we walk through how to rightsize or downsize a home in your client's plan.
Transcript:
In this training, we'll demonstrate how to use a What-If Plan to model the impact of downsizing, or "right-sizing," a client's home.
To begin, open the What-If menu and select Right-Size Home. You'll then be prompted to choose the property you want to replace. For this example, we'll select the client's Main Residence.
The new home purchase initially defaults to the end of the plan. Simply drag the event to the desired point on the timeline. In this example, we'll move it to Peter's retirement at age 65.
Next, review the ownership details for the new property. You can adjust the ownership structure if needed, but for this example we'll keep the home jointly owned by Peter and Martha.
Enter the value of the replacement home. In this scenario, we'll purchase a new home valued at $1.5 million and confirm that it is a future purchase.
You'll then have the option to finance the purchase with a new mortgage. Because the proceeds from the sale of the existing home are sufficient, no additional debt is required for this example.
Once you've reviewed the details, confirm the changes and choose Yes to keep the What-If Plan.
You can now compare the new Right-Size Home scenario with the Base Plan. In this example, selling the existing home and purchasing a lower-value property eliminates the projected shortfall later in retirement.
This What-If Plan can be a valuable planning tool when discussing housing decisions with clients. It allows you to demonstrate how downsizing may improve long-term cash flow, reduce future financial shortfalls, and support retirement goals.
To explore the results in more detail, enable the Details view to see how the property sale and purchase flow through the plan. You can also review the impact across Assets, Net Worth, Taxes, and Year View, and easily switch between the Base Plan and the Right-Size Home scenario to compare the outcomes.