The Real Minimum You Need Saved To Retire Without Downsizing, According to Experts

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For many retirees, staying in their homes is both a financial goal and an emotional priority. But figuring out how much you actually need saved to avoid downsizing is far more complicated than picking a target number. Housing costs rise, income streams fluctuate and longevity introduces new challenges.

Experts said the real answer comes down to a blend of income stability, realistic planning and understanding the long-term costs of homeownership in retirement.

Why There’s No One ‘Minimum Number’

Most retirees fixate on whether the size of their nest eggs is enough, but experts say that avoiding downsizing depends less on the total dollar amount and more on the stability of your income sources.

“There’s no universal number because everyone’s situation is different,” said Tom Buckingham, a U.S.-based retirement expert and licensed actuary who serves as chief growth officer at Nassau Financial Group. You have to take into account where you live, property taxes, insurance rates and local cost of living, he stressed. “It’s most important to build a plan that reflects your state and lifestyle, not a one-size-fits-all formula.”

If most of your retirement income fluctuates with the market, you’ll need far more saved than someone whose income is guaranteed, according to Chris Heerlein, CEO of REAP Financial. “I’ve sat with families who thought they were fine because they had a high number. But … if most of your retirement income [can] decrease in a down market, the minimum number you need is actually much higher to keep the house and not struggle,” he warned.

This makes guaranteed sources like Social Security, pensions or annuities especially valuable, since stable income reduces the pressure on savings and lowers the risk of being forced to move.

Estimate the True Long-Term Cost of Staying in Your Home

Hidden housing costs like taxes, insurance, utilities and repairs can escalate faster than retirees expect and more quickly than many retirement budgets can absorb.

Buckingham recommended starting with a detailed housing budget, then adding an annual inflation factor because these costs rarely stay flat. While he suggested planning for a 2% to 3% inflation rate, Melissa Macerato, chief revenue and marketing officer at Longbridge Financial, recommended more like 3% to 5%. Either way, she said retirees should “stress test these estimates.”

She also suggested retirees should save enough assets to replace 70% to 80% of pre-retirement income for at least 25 to 30 years.

Healthcare Costs and Long-Term Care Needs Change the Equation

Even retirees who feel comfortable with their savings can struggle later if they haven’t accounted for the impact of aging on both health and housing costs.

Living longer means more years of rising housing and healthcare expenses, Macerato noted. These competing demands can make it harder to remain in one’s home without a substantial financial cushion or plan for in-home care or increased medical spending. “[L]ong-term care needs can change the equation entirely,” she said.

A home that feels affordable at 65 may look very different at 85 when medical needs intensify, income sources shift and large repairs can’t be postponed, Buckingham added.

Strategies To Stay in Your Home When You’re Behind on Savings

Retirees who haven’t saved enough still have meaningful tools to work with, Macerato pointed out.

The first tool that can help is delaying Social Security, Macerato said, because it increases lifetime income. Additionally, a reverse mortgage can allow retirees to tap home equity to cover rising housing costs without giving up ownership.

Buckingham is also a fan of creating guaranteed income with annuities. But at the end of the day, simple steps like eliminating high-interest debt and unnecessary expenses are most effective.

Mistakes That Force Retirees To Downsize Too Soon

While downsizing is often a money-saving technique for retirees, it is possible to make financial errors that force downsizing too soon.

Macerato suggested that “underestimating property-related costs, not planning for major repairs, carrying excessive debt and withdrawing from retirement accounts too quickly” often lead retirees to downsize unexpectedly.

However, downsizing can be a smart financial and lifestyle choice if housing costs consistently take more than 30% of your income or the home needs major renovations, Buckingham said. In some cases, choosing a lower-maintenance home can preserve long-term financial stability and quality of life.

A Simple Rule of Thumb To Know If You Can Stay in Your Home

For retirees really opposed to downsizing who want to determine whether staying put is sustainable, Buckingham suggested a straightforward test: It’s possible “if you can cover your annual housing costs plus an extra 20% for unexpected expenses … and have guaranteed lifetime income to support those costs.”

This rule helps retirees quantify not only annual affordability but also long-term resilience — which ultimately matters more than a single savings target.

Retirement security is rarely about hitting one perfect number; instead, it’s about understanding your costs, stabilizing your income and building a plan that puts you where you most want to be.

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