Do You Really Have to Downsize When You Retire?

Each day in the U.S., more than 10,000 people reach the retirement age of 65. Once you start to approach that magic number that provides you with senior discounts and the ability to enroll in Medicare, you’ll probably start thinking ahead as to whether it may be time to move house.

While many seniors hope to age in place, remaining in a home that’s inaccessible or too big to manage isn’t usually preferable as we age. Ergo, many seniors wonder whether it may be time to downsize. But is downsizing really necessary? And is everyone still doing it?

Downsizing definitely has its advantages, particularly if you’re not where you want to be financially. According to a recent survey conducted by American Financing, 40% of older Americans said they still owed money on their mortgages into retirement, while 17% said they didn’t think they’d ever pay off their mortgage. That’s a scary thought, considering that housing is typically the largest expense for seniors. The U.S. Bureau of Labor Statistics estimates that housing costs the average senior around $1,322 per month, but that number could be higher if you live in a more expensive area. Many retirees may not have enough left over when all is said and done. Hence, many seniors may choose to pack up the 300,000-some-odd items in their homes (on average) and move to a smaller, more affordable property.

Some seniors may try to offset their costs even further by donating or selling their possessions before a move. Donating items to charity can allow you to save on moving expenses and be eligible for a tax write-off, while selling valuables could allow you to live a bit more comfortably in retirement. A survey conducted by found that 33% of baby boomers planned to sell items they no longer want. And with so many services on the internet, it’s easier than ever to get rid of those items for a fair price. As of 2016, there were 3.5 billion global internet users. That year, 45% of the world’s population accessed the internet. So if you’ve got some 19th or 20th century sterling silver items sitting around (you can tell they’re real if they’re marked with the number “925”) or have some barely used household items you think would interest others, you can downsize and make some extra income at the same time.

That said, downsizing doesn’t hold all the answers. Some seniors actually regret making the decision to downsize to a smaller home because the savings weren’t as substantial as they were expecting. And according to a recent Merrill Lynch retirement study, a growing number of older Americans are actually upsizing. Around 30% of seniors moved into larger homes so that they could provide living space for a caregiver or relative to move in or for family members to come visit. In fact, the National Association of Realtors found that older adults downsized by only 100 square feet in 2016, compared to the 500 square feet that seniors downsized by in 2004.

Ultimately, the decision about whether to downsize is completely personal. Although it can provide some financial benefits for certain seniors, it may not be worth it to others. It’s essential to consult with a financial planner to determine which options will provide the most security for you once you retire.

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