Purchasing a New Home (Downsizing)

Here you will find the steps for a downsizing scenario starting after the sale of the first home.  For steps to sell a home and pay off an existing mortgage click here

In this example, John Snapper has sold his original home in 2025 and paid off the mortgage with the proceeds.  We will now add the purchase of a new less expensive home. Automatic cash-flow management is turned on in this scenario in that year.  If automatic cash-flow management was turned off in this year, the software would assume all of the proceeds from the sale were spent.  If this was the case, you could manually enter contributions to the various assets.

1

Determine the future price of the new home. 

How much will the client expect to pay for a less expensive home or condo in the year 2025?  Perhaps 70% of their first home's value in that year?   At the end of the year 2024, the original house was valued at $607,244. A new home worth 70% of this amount is $425,070.

NOTE: For scenarios with a jointly owned Real Asset, use the Combined page to determine the future value of the home when it is sold.

2

Go to Scenario Setup -> Assets.

3
Enter a new Real Asset with a Future Purchase Age equal to the Future Sale Age of the original property.  Enter the amount of the new Real Asset in the Cost column. 

4
Proceed to the Planning page. 

In this case, the original house sale proceeds were used to pay off the existing mortgage, meet the desired After-Tax Spending needs of the client, purchase the Condo and the surplus was contributed to the Capital Assets.  

You also have the option to change where the proceeds are contributed.  Please click here for details on how to override the automatic contributions to the accounts and enter manual contributions.

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