Downsizing in Retirement: What to Know Before You Make the Move

Downsizing before retirement is usually about space and/or finance. Downsizing in retirement isn’t just about the house, it’s about the life you want in this new chapter.

Hi, I’m Cari McGee — I’ve been a Tri-Cities Realtor® since 2004, and I’ve helped countless retirees (and soon-to-be-retirees) think through this decision. You’re definitely not alone: According to the Transamerica Center’s annual retirement survey, 38% of retirees have sold their home and moved in retirement.

If you haven’t already, I suggest you read my article on the signs it’s time to downsize. This article picks up from there, for readers thinking specifically about downsizing in retirement, whether that’s already here or still a few years out. If that describes you, here’s how I’d think through it.

Retirement Changes the Question From “Should I?” to “What Now?”

Before retirement, downsizing is often hypothetical. You think about it, maybe you talk about it at dinner, but there’s no real deadline pushing you to decide. This is exactly where my husband and I are right now.

Retirement changes that. Once it’s real, or close to real, the question goes from “should I downsize” to “what do I want now?”

You might find yourself dealing with a mix of feelings — excitement about more time and fewer obligations. But also some uncertainty about what daily life looks like without the schedule you’ve had for decades.

Figuring out the “What now” question should guide your decision to downsize or not.

What “Right-Sized” Looks Like in Retirement

It’s easy to think about downsizing as just finding a smaller house. I’d push back on that a little. The question isn’t how many square feet you need. It’s what kind of retirement you want, and what home actually supports that. I like to call this “rightsizing” instead of downsizing. It’s less about giving something up and more about finding the home that fits where you are now.

In that same Transamerica survey I mentioned above, here are the three most common activities that retirees say they do:

• 58% spend more time with family and friends
• 43% spend more time pursuing their hobbies
• 36% spend more time traveling

You can see how this could be a big change to not only what size or kind of house you call home, but also where you call home. Many retirees choose to move closer to their kids or siblings. Others might prefer a home that’s more centrally located or closer to an airport so they can do more traveling.

Your age impacts the “rightsizing” decision

There’s a big difference between downsizing at 55 and downsizing at 75. At 55, you might want a home office or space for visiting grandkids. At 75, fewer stairs and simpler maintenance might matter more.

For many people, single-level living becomes a priority as you get older. Being close to medical care matters more, too, and so does being somewhere walkable, if staying active without needing a car for every errand is important to you.

I mentioned above the idea of “finding the home that fits where you are now,” but as you think about this decision, be sure to look ahead and consider what your home needs might look like in 10-20 years.

What About the Money?

For a lot of retirees, the home is the biggest asset they have. That Transamerica survey found the median retiree holds about $71,000 in savings outside their home, compared to $114,000 in home equity.

When you downsize, that equity can lower your monthly costs, add to your savings, or both, depending on what you buy next and what you owe on your current home.

That’s the short version. The full financial picture, including how much equity you might walk away with, what a smaller home actually costs to own, and how that changes your monthly budget, deserves its own article. I’ll cover it in full soon.

Do You Stay in the Tri-Cities or Move Away?

This is one of the bigger decisions for retiring homeowners. Some want to stay close to the community, doctors, and routines they already know. Others want to move nearer to kids and grandkids, or somewhere with different weather.

I’ve had clients do both. The people who stay usually tell me the Tri-Cities gives them what they need: a lower cost of living than much of the state, mild weather most of the year, and a slower pace without giving up conveniences. The retirees who leave are almost always moving toward family, not away from something here.

There’s no universal right answer here — just the one that fits your life and the people in it. If you’re planning to stay, I can help find the right place in town. If you’re planning to move away, I can connect you with an agent whom I trust to take great care of you just about wherever you decide to go next.

The Importance of Planning Sooner Rather Than Later

Some people plan years ahead of retirement. Others wait until they’re a few years in and ready for a change. Both are fine.

That said, energy and health tend to make moving easier sooner rather than later. Sorting through belongings, prepping a home for sale, and settling into a new place all take some physical and mental energy. It’s usually easier to have that in reserve.

Early planning might/should include things like this:

• Talking with your spouse or family about what matters most to each of you
• Getting a sense of what your current home is worth (I recommend you sign up for my free Homebot service)
• Reviewing your finances with someone you trust
• Watching what homes are available in the location, size, and price range that makes sense for you
• Starting to think about which belongings you want to bring with you

Even if this (or some of this) is all you do now, it means you won’t be starting from zero when you’re ready.

Frequently Asked Questions

Is it better to downsize before or after retiring?

There’s no right or wrong answer. Downsizing before retirement can mean more energy for the move and a settled home before your routine changes. Downsizing after retirement gives you more time in your current home and a clearer sense of what retirement actually looks like before you decide. Either can work well.

Will downsizing actually save me money?

It can, but it depends on your situation. Property taxes, utilities, and maintenance costs are usually lower in a smaller home, and you may free up equity in the process. The full picture depends on your specific numbers, which is exactly what I’ll cover in a future article on the financial aspects of downsizing.

What if I am not ready to sort through all of my stuff?

Totally normal. I don’t know anyone who could sort through a lifetime of belongings overnight. Let me suggest a first step: Go through your home one room at a time, and just make a list of things you think you’ll need for the long haul. Give yourself permission to go at your own pace. It can make the actual letting go of stuff easier if you’ve mentally planned and prepared for it.

Let’s Talk About What’s Next

This is exactly the kind of thing I help people work through. Whether you’re years away from retirement or already there and ready for a change, I’m happy to have a no pressure conversation about what downsizing could look like for you.

Get in touch anytime. Call or text me directly at 509-430-5342, use the Text Us button below, or send me a message through our contact form. I’d love to help you figure out what’s next.

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