by Emily Hechler 
Retiring comes with more free time, more time to think, and more time to plan your dream home! Many retirees choose to move to a smaller home at some point in their retirement, while others use their savings to upgrade. Downsizing may not be as popular as you think. Only 30% of empty nesters downsize in retirement. While you may have a list of reasons why you should or should not move, we put together a list to help you make the decision.
Pros of Downsizing in Retirement
There are many reasons people choose to downsize when they retire. After all, it’s your home, your money, and your life. Retirement is the time to find the home where you want to spend many more hours making memories. Here are some of the pros to downsizing.
Less House to Maintain
As a retiree, you’ll want to spend more time enjoying the freedom that comes without having a job. I haven’t met anyone yet who gets excited about cleaning a large house. If you choose to live in your current, larger home, there is more space to clean, more faucets to fix, more lightbulbs to switch, you get the idea. A smaller home comes with less space to maintain to make sure your home stays clean, safe, and retains its equity.
Additional Help
By downsizing to a smaller residence, you have several options to live close to help. You may decide to move to a condo or townhouse with an HOA that manages your yard work and snow removal, eliminating the need for you to do the physically demanding chores. You may decide to live in a retirement community with on-call medical staff in case of an emergency. If your children help take care of you, you can move closer to them.
Senior-Friendly Layout
Navigating stairs, a large layout, or steep driveway can be risky as you age. By downsizing in retirement, you can eliminate these obstacles on your property and look for homes with wider hallways and doorways, a walk-in shower with a seat, laundry on the main level, and other options to fit your changing mobility.
My grandparents have a two-story house with a finished basement. Stairs are difficult for them, so they installed chairlifts for easier navigation. They’re too in love with the house to change to a ranch-style home, so they made changes that made their home senior-friendly.
Lower Monthly Housing Costs
Downsizing in retirement can save you in your monthly housing costs. If you are still paying off your mortgage, your smaller home may have a lower payment. The area you move to may may also have lower property taxes and HOA fees. A smaller home is easier to keep cool or warm, reducing the cost of your utility bills. A house with less square footage is less for your insurance to cover, which may reduce your home insurance cost.
Free Up Home Equity
Downsizing may allow you to free up some of the equity you’ve built in your home, which could provide additional financial flexibility during retirement.
Cons of Downsizing in Retirement
While downsizing in retirement makes sense for some, it doesn’t for all. Even though this list of cons is shorter than the pros, some of the reasons may have more weight than the pros.
Cost of Moving
Selling a large house will likely come with hefty realtor fees and closing costs. This can make a dent on your current finances and may take a while to feel like you’ve recovered with reduced housing costs. Keep in mind that you’ll likely have to pay for movers to help lift and drive your furniture to your new home.
Less Home Equity
Because a smaller home may have a lower overall value, it could result in less available equity over time compared to owning a more expensive property. This may be a concern if you want to use a HELOC or Home Equity Loan with the new house. It also means less home equity to pass along to the next generation, but there may be more in your savings to balance the total.
Less Room for Hosting
This one can be a dealbreaker for extroverts. A perk of a large home is the space to host large groups of friends and family in a convenient location. By downsizing, gatherings like these may be harder to navigate. This may be an issue if you have live-in care while hosting out-of-town family members regularly for visits.
Emotional Attachment
Our homes are full of memories. Some families have decades of life milestones tied to their homes like bringing their babies home from the hospital, hosting birthday parties, and watching loved ones grow up. For some, they’d rather stay in a large, less convenient house simply because the positive moments outweigh the negative aspects. Sentimental spaces are difficult to say goodbye to. So why do it if you don’t have to?
To Move or Stay Put?
Selling a home and finding a new one takes a lot of work. There isn’t one right answer to deciding whether to stay in your current home or to downsize. Your decision will be impacted by your health, family, financial situation, and a variety of other factors. Remember that there is no one-size-fits-all answer. Focus on the option that best supports your lifestyle, financial goals, and long-term needs so you can enjoy your hard-earned retirement.
