As baby boomers reach retirement age, downsizing for retirement living is becoming an increasingly popular option. Moving to a smaller home can provide many benefits, allowing retirees to reduce expenses, simplify their lifestyle, and find a home more suited to their needs. This article provides an overview of downsizing for retirement living, including the key steps involved and factors to consider when making the transition to a smaller home.
Why downsize for retirement?
There are several compelling reasons retirees may choose to downsize their living situation:
- Reduce living expenses: A larger home typically comes with higher property taxes, heating/cooling costs, insurance, maintenance and other expenses. Downsizing to a smaller space can significantly reduce monthly bills.
- Eliminate unnecessary space: Empty nesters often no longer need extra bedrooms and space once their children have moved out. A smaller home is easier to clean, maintain and furnish.
- Free up retirement savings: The profit from selling a larger home can pad retirement savings and serve as a financial cushion. Equity from a home sale can also fund renovations to customize a new home.
- Simplify lifestyle: Managing and maintaining a large home is demanding. A smaller space allows retirees to focus time and energy on travel, hobbies, family and friends.
- Find a home suited to aging: A single-story, accessible home or building with amenities like a doorman and elevator can support independent living as retirees age.
Key steps for downsizing for retirement living
Downsizing for retirement is often an emotional process tied to memories, milestones and possessions. Advance planning and organization can help make the transition smooth and successful.
1. Set goals
- Determine ideal location, size, features and budget for new home
- Decide which possessions to keep versus donate or sell
- Set a timeline for the move to minimize stress
2. Research options
- Browse real estate listings online and explore communities of interest
- Schedule tours of homes/communities that fit parameters
- Consult with a real estate agent who specializes in downsizing
3. Prepare your current home for sale
- Organize and declutter rooms; pack seldom used items
- Make any needed repairs and upgrades to maximize sale price
- Work with an agent to set a competitive listing price
4. Coordinate logistics of the move
- Schedule movers and reserve moving truck well in advance
- Arrange storage unit if needed for extra belongings
- Transfer utilities and services to new address
- Forward mail and update accounts with new address
Factors to consider when downsizing for retirement living
Downsizing for retirement requires both practical and emotional considerations. Important factors to weigh include:
- Location – Proximity to family, amenities, healthcare, and transit
- Size – Optimal square footage and room count
- Layout – Preference for single-story, accessibility features
- Affordability – Balance monthly expenses with retirement budget
- Maintenance – Ability to handle home upkeep and yardwork
- Community – Desired amenities and opportunities to socialize
- Storage – Available space for hobbies, extra furniture, memorabilia
This table summarizes factors to consider based on retirement downsizing goals:
|Reducing expenses||Size, affordability, maintenance|
|Simplifying lifestyle||Location, size, layout, maintenance|
|Aging in place||Layout, community amenities, location|
|Freeing home equity||Size, market value, affordability|
|Easy mobility||Location, community amenities, maintenance|
Tips for downsizing your possessions
paring down belongings is often the most daunting part of downsizing for retirement living. These tips can make the process manageable:
- Take stock of what you have – A room-by-room inventory helps prioritize what to keep versus donate or sell
- Get ruthless – If you haven’t used it in a year, you probably don’t need it
- Find new homes for keepsakes – Donate to organizations or family members where they will be appreciated
- Hire help if needed – Movers, organizers and estate sale companies can assist with sorting and removal
- Go paperless – Scan important documents to reduce paper clutter
- Pare down collections – Keep only your very favorites or most meaningful
- Let go of unused furniture – Sell or donate pieces that won’t work in your new home
- Take advantage of bulk trash pickup – For disposing of items that can’t be donated or sold
- Sell valuables – Use online marketplaces or consignment stores to convert unwanted items to cash
The process of downsizing for retirement living extends far beyond finding a smaller home. Careful preparation, organization and decision making around what to keep versus let go of is key to making the transition successful. While it takes effort, the reward is enjoying a simplified lifestyle in a home that suits this new phase of life.
Frequently Asked Questions about Downsizing for Retirement Living
What size home should I downsize to?
This depends on your needs and lifestyle. Many experts recommend sizing down to a home with about half the square footage of your current home. For example, downsizing from a 2,500 square foot house to a 1,200-1,500 square foot condo or townhome.
How far in advance should I plan my downsize?
Ideally 12-18 months so you have time to prepare your current home for sale, research options, declutter possessions and coordinate logistics. However, 6-8 months of planning can also work.
Should I downsize before or after retiring?
It’s generally recommended to downsize either shortly before retirement or in the first couple years after retiring. This allows you to reap the full financial benefits. Downsizing too long before retirement could mean having to declutter and move twice.
What’s the best way to declutter my home before downsizing?
- Systematically sort through each room, donating, selling or disposing of items.
- Start early, decluttering a little each week.
- Set aside keepsakes for family members.
- Shred/digitize old paperwork and files.
- Use a decluttering service if needed.
How can I estimate proceeds from selling my home?
Consult with one or more real estate agents to receive estimates on the potential listing price and final sale price for your home based on market data. This will account for any needed repairs or updates.