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Downsizing For Seniors

Housing is just one example of how life comes full circle. When you got your first place, perhaps it was a small one-bedroom apartment above a sandwich shop. Maybe you then moved on to purchase a small starter home. After marriage, kids and a step up the career ladder, perhaps you upgraded to a larger home.

But after the kids are grown and your career ends, you’re ready to downsize.

There are several benefits of downsizing to a smaller home as an older adult. Here are some tips to follow, pitfalls to avoid and things to know as you look to downsize in retirement.

Couple dancing in their kitchen

Benefits of Downsizing

There can be some big benefits to going small. If you’re on the fence about downsizing your home, consider these advantages:

  • Saving money
    A bigger house costs more money to heat and cool, typically carries higher property taxes and can bring countless other expenses that might be lessened with a smaller home.

  • Cashing in your investment
    If you own a lot of equity in your home and could use a little help funding your retirement, downsizing is a great way to put some cash in your pocket.

  • Having a safer and more comfortable home
    Downsizing your home can mean getting rid of stairs, high cabinets and other difficulties that can make a home unsafe or uncomfortable for an older adult.

  • Enjoying less upkeep
    Larger homes typically require more maintenance in the form of bigger yards to mow and more floor space to clean.

  • Getting a fresh start
    Retirement signals a new beginning, and a new home can do the same. Downsizing can mean moving to be near grandchildren or closer to amenities you’ll utilize in your golden years such as golf courses or community centers.  

Renting vs. Buying a Home

One big question that arises when it comes to downsizing is whether you should buy or rent your new downsized home.

There are advantages to both, and the best option will be different in each case.

  • Buying
    If you net a big enough profit from the sale of your home, you may be able to purchase a downsized property in cash. Now with 100 percent equity in your new home, you’ll have a sizable asset to leave behind as an inheritance.

    Buying also affords you the luxury of customizing your home, something that older adults may wish to do in preparation for becoming less mobile as the years tick by.

    Lastly, buying can provide more options and a more comfortable environment for pets.

  • Renting
    Part of the fun of no longer being tied to a job is not having to be tied to any one location either. It can also be a good idea to rent for a year just to make sure you like the area and will be happy there before committing to a purchase.

    Renting is also a good option if you decide that home maintenance is no longer for you, a common reality for many older adults. Renting an apartment can also bring some amenities right to your doorstep, such as a pool or gym.

House made out of money

Traps to Avoid

Moving out of one place and into a new one comes with some potential traps to be aware of, no matter the circumstances.

When downsizing, it’s important to avoid the following common pitfalls:

  • Overestimating the value of your home
    Whether you chalk it up to sentimental value or the recent sale price of the house across the street, homeowners overestimate their property value by 8 percent, on average.

    And if you’re banking on that profit to boost your retirement, an overestimation of your home’s value can be an overwhelming disappointment.  

  • Underestimating the cost of a new home
    The flip side of overshooting the value of your current home is underestimating what it will cost to buy your downsized home. When looking at potential houses to buy, consider more than just the asking price.

    There are closing costs, agent commissions, property taxes, cost of living factors, homeowners association dues and more to consider before you make a purchase.

  • Falling victim to nostalgia
    Downsizing your home requires downsizing your belongings. Many people struggle to get rid of some of the things that have been a part of their life for so many years.

    As a result, they end up with a downsized home that is highly cluttered, or they feel the need to add an extra monthly expense in the form of a storage unit.

Decluttering Tips

Downsizing and decluttering be physically daunting, and it can be emotionally taxing. Anyone considering downsizing could benefit from some useful decluttering tips.

  • Start the process at least three months in advance
    You have more stuff than you think, and waiting until the last minute to declutter is a recipe for added stress in an already-challenging time.

  • Start with the easy areas
    Garages and kitchens are two great places to start because there’s typically less sentimental value in a snow shovel or spatula than in many of the items in your attic or children’s old bedrooms.

  • Get help from the professionals
    There are a number of companies that can help you declutter your belongings. If the process feels too overwhelming, consider enlisting the help of a professional.   

  • Follow the O.H.I.O. rule
    Only Handle It Once. That means making a “yes” or “no” decision on each item and not saying “I’ll come back to that” or establishing a “maybe” pile. Don’t move on to the next item until you’ve reached a decision with the current one. 

If you’re thinking about downsizing, there’s no better time than the present to do it.

You may be more equipped for the physical and emotional stress of moving while you're in your 60s than you might be in your 70s or 80s. So size up your current home and finances and consider taking things down a size.

Save Money on Your Healthcare Costs

While downsizing your home in retirement, it's important to also make sure you're not spending more than you should on your health care costs. Check out this guide to 10 Medicare mistakes you could be making.

You can also save money on some of your out-of-pocket Medicare costs when you apply for a Medicare Supplement Insurance (Medigap) policy.

A Medicare Supplement plan can help pay for certain Medicare deductibles, coinsurance, copayments and more. If you suffer an injury or an illness, these out-of-pocket Medicare costs can add up quickly. Having a Medigap plan can help avoid unpredictable expenses.


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Christian Worstell is a health care and policy writer for He has written hundreds of articles helping people better understand their Medicare coverage options.

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