Tips for Downsizing in Retirement

Bob Carlson


Home equity and the home are the most neglected and misunderstood factors in retirement planning.

Since home equity is one of the largest assets for many people, a lot of money is left on the table.

Surveys indicate that about 40% of baby boomers plan to move sometime after retiring. Many people assume they’ll downsize to a smaller home.

The equity extracted from the sale of their old homes and the lower living expenses of the new homes will help fund retirement.

It’s a good plan, but many people don’t execute it well.

Here are some tips I’ve gleaned over the years for downsizing in retirement:

Before putting your old home up for sale and searching for a new home, consider whether you’ll really be able to downsize.

With married couples, often one spouse is gung ho for downsizing while the other is tepid at best, quietly going along.

Be sure this is really what both spouses want, and that one spouse isn’t going along simply to avoid conflict.

It’s a long-term decision, and you don’t want one spouse depressed or resentful because of the change.

For some people, the old home is a status symbol, a measure of self-worth, accomplishment, or something similar.

Even if they don’t say so, they fear downsizing could be seen as an indication that they aren’t as well off as they want people to think.

After considering the emotions, there are other factors to consider.

There’s a lot of work involved in downsizing. Many couples have decades of belongings accumulated in their homes. Winnowing all that down takes a lot of time and physical effort.

Exclusive  The USA is Back on the Global Competitiveness Podium

It can also be a very emotional experience deciding which items to keep and which to part with.

Once it’s decided to part with an item, you also have to consider whether to donate it to charity, sell it, throw it away, or try to convince family or friends to take it.

People who’ve streamlined their possessions tell me that you should begin this process at least a couple of years before you plan to move.

Of course, preparing the old home for sale could involve a lot of additional work.

The amount of work required depends on how well you’ve maintained the home, the state of your local real estate market, and the philosophy of your real estate agent.

Most retirees or near-retirees will need contractors to perform all or most of the work, so it will take time and cost money.

Downsizing could also affect your social or family life.

When the children and grandchildren live in the same area as you, it might not be a problem.

When the children live somewhere else, they might visit less often or make shorter visits when your new home isn’t large enough to comfortably accommodate the full family.

Downsizing also could mean you won’t be able to take in an adult child who needs temporary help, or a parent who no longer can live alone.

Consider all these factors carefully before deciding to downsize.

Once you’re convinced the lifestyle changes from downsizing are acceptable, carefully run the numbers to see the financial effects of downsizing.

Exclusive  Yellen, Fed's Decision Could Look Back at ECB Results

Next week, I’ll share more helpful tips for downsizing in retirement.

You can find Part 2 of this post here -> How To Downsize in Retirement: The Financial Impact.

Like This Article?
Now Get Bob's FREE Special Report:
7 Secrets to a Wealthier Retirement

These [100% legal] strategies could make – and save – you a fortune. Take hold of your retirement nest egg with this brand new research, FREE of charge.

Get Access to the Report, 100% FREE

previous article

Investment expert Dr. Mark Skousen discusses the insufficienciencies of the two parties


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen publishes 5 different investment newsletter advisories, including the award-winning Forecasts & Strategies, which has beaten the market over the last 15 years.

Product Details


Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays. Bryan's four newsletter and trading services include:

Product Details


Nicholas Vardy

A Stanford and Harvard Law graduate, Nicholas Vardy scours over 40 different global markets every day to uncover new profit opportunities for subscribers. His 3 advisories and trading services include:

Product Details


Jim Woods

A 20-plus-year veteran of the markets, Jim Woods has varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.

Product Details


Bob Carlson

In Bob's monthly newsletter, Retirement Watch, he provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details


Mike Turner

Mike’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details


Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.