Downsizing The Home After Retirement Downsizing The Home After Retirement

The average home in the 70s was 1,500 square feet with three bedrooms and one and a half baths.  Today, they are even larger, with huge kitchens complete with an island for cooking, more bathrooms than there are occupants, and extra spare bedrooms that sit empty.  Because of the rising costs of heating and other utilities, it is wise to downsize the home after retirement and/or after the children are gone.  This article discusses downsizing the home.

The Case For Downsizing

According to Money magazine, 30% of readers want less space, 23% wish to take profit, and 20% want lower taxes.  These reasons alone warrant downsizing.  Heating oil prices soared 30% last winter, and natural gas is up 10%. Couple this with the recent mortgage market change -- the value of homes has gone into a downward spiral -- and downsizing starts looking a whole lot better.

Assess Your Needs

Has the family grown up and left for college? Are you concerned about the rising costs of property taxes and utilities? Do you and your spouse want to travel without being burdened by a large home that takes a lot of maintenance?  Is the cost of upkeep eating into the money you want to use to comfortably retire?  If you answer yes to any of these questions, then downsizing is for you.

What Do You Really Need?

Consider your home, its functions, and what you actually use.  Is there a formal dining room that is never used?  A huge kitchen that is used for warming up soup and microwaving frozen pizza?  Have the kids gone to college and left you with two or three empty bedrooms?   Evaluate the home and see just exactly what you need and would like changed.  Maybe you would like more storage space, such as a pantry, instead of that large family kitchen.  You and your spouse could eat your meals in a sunny kitchen breakfast nook instead of staring at each other down a long formal dining room table.  In the final analysis, when you retire you want to spend more time with your spouse, and less time caring for a huge yard. It is what retirement is all about.

Consider The Financial Aspect

It makes little sense for a couple to roll around in a big home like a marble in a tin cup.  Unless you have unlimited funds, it makes little sense to live in a big house.  Crunch the numbers to see if it makes sense for you to downsize.  An example: You live in a home valued at $700,000. You currently make a mortgage payment of $2,160 at 7% interest.  If you have lived in your current home for a long time, then you have a good sized chunk of equity in that home.  Selling the home might net you $350,000, which would go a long way toward purchasing a smaller home with less space and a considerably smaller mortgage payment. 

Why Downsizing Makes Sense

Unless you just cannot live without the lifestyle of your current large home, downsizing makes sense.  Quality of life is not decreased by moving to a smaller home.  In fact, it usually increases, because you have less to take care of and the money you save can go toward enjoying your retirement more. If you have a large family, it might be a bit inconvenient when they all come home for the holidays, but you must take into consideration that the holidays don't take up 100% of the year, and these things can be overcome.

The Case For Moving

Many young couples tend to live in neighborhoods that are easily accessible to their jobs and careers.  They want to be near the best public schools for their children, and want to be near shopping malls.  A retired couple does not have these problems.  Because living in the type of neighborhood that the young couple desires means a higher cost of living, it makes good sense for the retired couple to move to a location that is less expensive to live in.  Consider these things:

  • Access to medical facilities
  • A close proximity to family and friends
  • The yearly weather conditions
  • Access to airports
  • Access to social activities and entertainment

Downsizing makes the most sense for retired couples.  A snug, energy efficient home is a good investment and frees up the couple to enjoy their retired life. Consider downsizing, and feel good about retiring.

Alden Smith is an award winning author and regular contributor to He writes on a variety of subjects, and excels in research.

Got a New Project You're Proud of?

Post it on Your Projects!