Should You Downsize in Retirement?

Here's a piece asking if you should downsize in retirement. 

It goes through a discussion of the pros and cons of going from a large house to a smaller one in retirement.

We are having this discussion in our home. We have a large, 3,700 square foot house that is too big for four people, much less two (the kids aren't fully out yet, but both are close).

So we've been batting around whether to stay put or sell and downsize.

For now we've decided to stay put until we see where the kids land. If they remain in our town we'll probably stay in our home since the market is white hot and while we could make good money selling our home, we'd have trouble finding a place we'd like (size, location, etc.) at a reasonable price.

We've also talked about moving to an apartment, which would give us more travel flexibility (not having to worry about a stand-alone house) but we're not sure we could deal easily with close neighbors.

Here are some of the other issues we've been considering:

• Obviously when you downsize a lot of your life becomes easier. There's not as much to clean and maintain. There's not as much yard to mow or driveway to shovel (moving to an apartment or condo would eliminate these completely). A lot of the hassles with owning a large home would go away.
• So would a lot of the costs. Maintenance. Taxes. Insurance. Utilities. All would decline sharply or disappear completely.
• That said, a house gives you a lot of freedom. You can change it how you want. You have privacy. Your neighbors, while still close to you, are not attached to your dwelling physically. You can select from neighborhoods you prefer (limited a bit with apartments).
• You also have plenty of space. You can have friends or family come and visit and there's plenty of room for all. Right now our basement has a bedroom, full bath, small mini-kitchen, small living room, and an entertainment room. It's perfect for guests as they have their own place to stay when visiting us.
• In addition to what sort of place to live in, we'd need to decide where to live. We love Colorado, but if our kids were far away, we'd probably want to live closer. And while I've pretty much eliminated the option, buying a place in the Caribbean still comes to mind now and then.

Those are our random thoughts on downsizing in retirement. What do you think about them? And what about your own retirement? Have you downsized in retirement or are you planning to when you do retire?

Comments

[Jon Sharpe]

I often think about downsizing when I retire, probably in eight years or so. The piece worries me is having room for the kids along with significant others and eventually grandchildren to come and visit for the holidays. It's only a few days a year max, unless you live at the beach I suppose, but that's the piece that gives me pause. Otherwise, having the reduced expense and stress along with increased travel flexibility sounds really nice!

[Liz]

I agree with Jon's comment.

Though I am far from retirement, from a child's perspective - I grew up poor and my parents are still poor, living in a very small home. I'm in the military now, and it's difficult to come home and visit because there is no room for me to stay, so I have to end up crashing on the couch.

I love my parents, but at times, I wish they had a house that at least had 2-3 spare bedrooms so we could all come together as a family during holidays etc.

Downsizing is not a bad idea, but consider keeping a home that can still handle your adult children visiting once they have families of their own.

[Kenny]

Author's comments are great.

We are in an identical situation.

Have a 5500 sq ft home with just 2 of us. Kids have moved out but not married and no grand kids.

It is too much to maintain, but also too high real estate tax zone that we are living in.

We have been searching for a perfect home, but after having a good size home, a perfect home with all kinds of amenties, size, finished basement, room for 'stuff' is lacking! So, it has been a challenge to find the perfect home, but we are hell-bent on moving out in 2019 since that was the original plan, and I usually carry out my goals/plans.

Our plans are to get into a home with taxes that are 1/2 of the current, and a home that is in the 2xxx sqft range. Our search criteria is newer home with enough room that if the kids and their families come to stay with us, they will be adequately accomodated in a 4 bedroom home. Townhome was our first goal, but that turned out to be a bad idea since RE Tax + HOA is still a high number. So, it is back to SFH with low taxes in a suburb close to current home, but allows us to run our business also (close-by) and yet does not have the greatest schools and hence the taxes are lower.

Giving up 'stuff' will be key and we have started to shed stuff slowly, and also getting the current home ready and in a shape where we can sell at a decent price.

The other BIGGEST issue we are dealing with is that big huge homes (3K+ sqft) are not in demand anymore, and that is our 2nd motivator to move out. So, there you have it. Reasons, logic, emotions, and of course there are other pros and cons to deal with......

Many of the readers might have mortgage on their mind, but our financial state is such that it is not an issue in the mix, but wasting RE Taxes to feed the schools is not our purpose either (although it was an objective once upon a time, but our kids are out) and therefore someone else should be paying for the schools by living in our current home and sending their kids to good schools just makes more sense.

Hope this gives another supporting viewpoint.

Kenny

[Anne]

However, I would also like to keep my home, I never know what will happen, and making hasty decisions is a really bad idea, it's worth waiting and seeing what happens, where kids will live, etc. It will always be their family home and probably will often come back to it , maybe they will also live in it someday, so for me, maintenance is the only solution.

[Mary Ann Thornton]

Downsizing:

One important thing to consider; as we age decluttering becomes difficult. The things you have now may not matter in 10 years and further down the road.

2. When you walk out of your home, can you walk to a grocery, a library, a church, a drug store. At some point, most people have to stop driving. If your home requires a car to do all the things you want to or need; that is tough.

3. My memory your parents are still alive. (you talked about them on cruises) What if you bought a apartment building with space for all of the above. You could make it accessible (bathrooms, doorways, etch) and yet all would have privacy. And if they weren't using it well there is Airnb.

4. Is your home accessible? What if you had surgery and couldn't climb stairs-would it still work. Can you reach most of the items in the kitchen. If reaching up or down becomes difficult could you still cook there.

5. I am not qualified to discuss financial; but property taxes are important.Nor am i qualified to discuss children.

Just some thoughts. MAT

[texashaze]

We're 2 years from empty nesting and are thinking of downsizing. House is perfect - great location, big, beautiful, pool w/spa, can't see neighbors while in city, etc... But RE taxes ridiculous and it's just too much. The thought of a smaller space with lower taxes and in a location to 'spice' to my marriage sounds enticing. For what I do I could live wherever I wanted - mountains, beach, corn field, etc. Blockers are that we want to be near kids for when they marry and we've built life in our town with relationships, etc.

Now considering downsizing in same town or nearby and then buying another small place at the beach or mountains. We could live in those spots in winters or summer depending. Also thinking of selling existing home to oldest kid with seller financing. Have to think that one through though.

Would love to see more analysis on downsizing and empty-nester living.

[M22]

We have decided not to downsize, at least for another 5-8 years. We are 68 and 73 but really enjoy our home (7200 sq ft) and our second home (1950 sq ft), as they are ideal for us - location, quiet, many amenities, etc....and we can easily afford the expenses - that is the advantage/luxury of being financially independent.....We are working to declutter and reduce the stuff one accumulates in a lifetime.

M22

[Biuro Kooperacja]

Reducing the living space by changing the place of residence for older years is a good idea. We know, we do not need such a large house in two anymore. Smaller means also cheaper and easier to maintain which can also somehow affect the improvement of the comfort of the apartment. In addition, there are savings that will accumulate through such and not save money. I am sure that my parents will do the same after my departure and my brother. I agree completely with fasting. Regards ;)