Don’t Downsize for Retirement Too Soon — Here’s How To Decide When To Make the Move

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If you’re about to retire, you’ve likely read or heard the advice that you should prepare to downsize. After all, many retirees are empty-nesters with larger, paid-off homes that may no longer meet their needs.

But before you make any hasty decisions, it’s worthwhile to evaluate when you should downsize, or even if you need to at all.

Here are some of the factors to consider when determining whether downsizing in retirement is the right move for you.

Space

If your kids have moved out of your house and you are down to a one- or two-person household, it’s true that you may no longer need all those bedrooms for your family. But that doesn’t necessarily mean that you should downsize. 

For one thing, you might still need lots of extra space for your stuff. By the time you’re about to retire, you’ve likely accumulated a lifetime’s worth of furnishings, trinkets, and memorabilia. If you rush to downsize, you might find that you’re lacking the space you need to store everything.

Some retirees also simply enjoy having extra living space. While things may have been a bit tight with the entire family in the house, when you’re a retired empty nester, it can be enjoyable to have extra rooms to spread out in.

Privacy

For some retirees, downsizing means taking on a roommate or moving to a senior facility. But that, by definition, involves trading off privacy. If you stay in your own home, you won’t have those privacy issues, and that can be a valuable consideration for some retirees.

Guest Accommodations

If you downsize to a studio or one-bedroom home, you won’t have any space for guests. Even if you’re not the type to host a large number of overnight guests, if you have children, it’s likely that you’ll want them to visit at least occasionally. If you give up the extra space in your home by downsizing, your children and/or visitors will have to stay at a hotel or other local accommodation instead. 

Neighborhood

Downsizing is often accompanied by a change in neighborhood. While this can be a plus for some retirees, others may be reluctant to move away from a neighborhood they have called home for multiple decades. Not only is there a level of comfort and familiarity with remaining in the same neighborhood, but you’ve likely cultivated relationships with neighbors or other community members. Leaving those connections behind just to downsize could be emotionally difficult, impairing your quality of life in retirement.

Finances

Although downsizing can often result in financial savings, they may not come right away. In fact, the act of selling your house, packing up your belongings, and setting up your new life will result in higher out-of-pocket expenses, at least initially. This is a good reason to wait for at least some amount of time after you retire before you downsize. This will give you a chance to live a bit with your real-world retirement budget and see how your income and expenses align before you shell out money to downsize. 

The Bottom Line

For many seniors, downsizing after retirement makes sense, as it can often result in lower expenses and less hassle. But there’s no need to rush into it in most cases, and you shouldn’t focus solely on the potential financial benefit. Many factors go into downsizing, and you should consider how all of them may affect the quality of your retirement lifestyle so that you don’t end up regretting your choice.

Of course, downsizing may very well be the right choice for you, and there’s nothing wrong with it. Just take the time to see the whole picture before you make a move. That way, you’ll know if and when it’s the right time to downsize.

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