Is it Time to Downsize? The Pros and Cons of Moving to a Smaller Home in Retirement

Whether you’ve recently retired or your last baby bird has just left the nest, you may be wondering if it’s time to downsize. With vacant bedrooms and a backyard that no longer serves as a playground, many homeowners in the 55+ crowd begin to wonder if they should move somewhere smaller — perhaps to a place more physically and financially manageable. But not all seniors see unused space as wasted space, and in fact, see advantages to staying in the family home well into their golden years.

If you’re on the fence about downsizing in retirement, or trying to help your parents with the decision, we’ll explore the advantages and disadvantages on both sides.

In many cases, there are significant benefits of downsizing:

The upkeep of cleaning a large home (including rarely-used rooms), fixing things that keep breaking, mowing an expansive lawn, and shoveling a long driveway can all become taxing with age. Many seniors prefer moving to a home where they only have to take care of the indoor space they use, and where there’s a smaller outdoor area to care for.

Other options for downsizing include moving to a condo or townhome, where you still own the property but someone else maintains the landscaping and handles snow removal. Or, instead of buying another property, some might opt to move to a rental where the landlord will fix any interior issues.

There may have been a time when a stately two-story was perfect for your family, perhaps with all the bedrooms upstairs to keep clutter out of sight. And you probably didn’t bat an eye at the laundry room being in the basement when you bought the house. But with age comes arthritis, knee pain, and other issues that can make going up and down steps challenging. Moving to a ranch or a ground-level condo might make daily living easier — and less painful. 

And even if you or your spouse don’t currently deal with physical ailments, it might make sense to prepare for the future. Many seniors downsize to a home where they can age in place, knowing that if illnesses or handicaps do happen, they can stay put.

Perhaps you’ve always wanted to travel but couldn’t because of college tuition payments, or you were always in the middle of an expensive home project. Now that the kids are out and you don’t need the extra space, downsizing in retirement could mean a bigger budget for going where you want, whenever you want.

The mortgage, property taxes, utilities, and maintenance of a large home are often too much for seniors to afford on a fixed income alone. According to a Bankrate survey, 57% of working Americans feel behind on their retirement savings. Moving to a smaller, less expensive home could make monthly expenses more manageable, especially if you can use the profit from the sale of your old home as a down payment on your next purchase.

While there are plenty of good reasons for seniors to move to a smaller home, some see more benefits to staying put, like the retirees on this online forum. Their reasons for not moving include not minding home maintenance, having plenty of storage, and liking the proximity of their home to shopping, entertainment, and family. Here are some other reasons you might decide not to consider downsizing in retirement:

Planting a garden or flower beds brings joy to many seniors, while raking the leaves is a great way to stay active. And even when an expansive lawn gets to be too much, some seniors opt to hire someone to mow and do more difficult landscaping projects. Moving to a smaller home or condo might mean a much smaller yard, sharing the space, or having no yard at all. 

Just because rooms sit vacant sometimes doesn’t mean they stay empty all year. When adult children and grandchildren visit, it’s nice to have bedrooms they can sleep in, or a dining room that’s big enough for everyone to gather. And it’s hard to rule out that adult children won’t return for good. According to a recent survey of 2000 parents whose kids in their 20s still live at home, 69% said their child asked to move back in because they couldn’t afford to live on their own or wanted to save money.

If you’re living in an area where the home values have dropped, or haven’t increased significantly since you bought it, selling it won’t result in a substantial down payment for your next home. Or maybe you’ve paid off your home and gotten used to not having a mortgage payment. In today’s market, buying a smaller but newer home could mean taking on a mortgage again or using a lot of your savings to afford it. 

Buying any house in retirement requires careful financial consideration. If downsizing means wiping out future nursing home care, it may be wise to tuck some of that money away. You’ll also need to consider whether you will owe capital gains taxes, in addition to moving expenses, closing costs, and other fees involved with purchasing a home.

There is clearly no right or wrong answer when it comes to the question of downsizing. The decision is a personal one. You will need to take the time to weigh the pros and cons and speak with family members about your options. 

If you decide it’s time to downsize, the agents at Berkshire Hathaway HomeServices Select Properties have the expertise and experience to help. We can sell your home for a great price and find a new home in your price range. That may be a smaller house, a senior community in the St. Louis area, or a condo, depending on what fits your needs and budget. We have helped many residents downsize and would love to be a part of your next chapter. Contact us today to get started.