Upgrade Your Retirement by Downsizing: 15 Major Cities Where You Can Save the Most

There’s no doubt that there’s a savings shortage when it comes to Americans and their retirement. One GOBankingRates study even found that a whopping one-third of Americans have less than $100 saved. With the average Social Security retirement payment coming in at just $1,788.89 as of June 2023, it’s clear that additional savings must be unearthed somewhere to make for an enjoyable retirement.

Fortunately, the number one asset that most Americans have is their home, and the runup in prices over the past few years has created substantial equity. Although moving to a lower-cost area can certainly stretch retirement dollars, there’s a strategy that allows you to stay in the city you already live in without having to cut anything else in your budget: downsizing.

In many American cities, simply swapping from a four-bedroom house to a two-bedroom house can significantly boost your nest egg in one fell swoop. As many seniors don’t need a massive amount of square footage in retirement — or the maintenance and upkeep costs as well — downsizing to a smaller home in a place you love makes sense for a lot of reasons.

GOBankingRates conducted a survey using Zillow’s June 2023 home value data to find where you can save the most by downsizing, chosen from among the 100 largest cities. The results of the study are presented below, in reverse order.

• 4-Bedroom Home Value: $610,663
• 2-Bedroom Home Value: $289,779

Tampa is one of the many retirement havens in Florida, and that demand helps keep prices up. But downsizing from a four-bedroom to a two-bedroom home could help you boost your retirement kitty by over $320,000 on average.

• 4-Bedroom Home Value: $897,939
• 2-Bedroom Home Value: $568,728

Chula Vista is a great place to live — and retire. Nestled against the San Diego Bay and boasting some of the best weather in the world, demand is high in this seaside city, with prices rapidly approaching an average of $900,000 for a four-bedroom home. But if you no longer need all that space, you can save 36% on average by moving into a two-bedroom house instead.

• 4-Bedroom Home Value: $609,887
• 2-Bedroom Home Value: $274,384

This northern suburb of Washington, D.C. offers residents the chance to live in a relatively affordable area while still being just a short commute from the nation’s capital. Two-bedroom houses are available for under $275,000 on average, well below the national average.

• 4-Bedroom Home Value: $609,418
• 2-Bedroom Home Value: $245,388

Everything may be bigger in Texas, but home prices — and indeed, the state’s entire cost of living — still remain relatively affordable. This is particularly true in the case of two-bedroom houses, which can save you over $364,000 vs. buying a four-bedroom home. If you live in Dallas and are downsizing, that amounts to an immediate and significant boost to your retirement savings.

• 4-Bedroom Home Value: $1,143,796
• 2-Bedroom Home Value: $767,440

Love it or hate it, the glitz and glamor of Los Angeles make it a very expensive place to live. If you’re fortunate enough to own a four-bedroom home there, you can give your retirement nest egg a quick $376,000 pop simply by swapping it out for a two-bedroom.

• 4-Bedroom Home Value: $1,042,857
• 2-Bedroom Home Value: $664,502

Long Beach used to be the smaller stepsister to glamorous Los Angeles, but now the two cities nearly blend together. The formerly overlooked city is now one of the most expensive in the nation, with even two-bedroom houses topping $664,000 on average. But that’s nearly $400,000 less than the cost of a four-bedroom house, making it a great place to save by downsizing.

• 4-Bedroom Home Value: $1,024,128
• 2-Bedroom Home Value: $605,957

The nation’s capital has its share of rough-and-tumble areas, but it also has a large concentration of the nation’s wealth. With the average four-bedroom home topping $1 million, there’s a lot of money to be saved by swapping to a smaller abode.

• 4-Bedroom Home Value: $1,168,962
• 2-Bedroom Home Value: $699,896

Seattle’s gorgeous waterfront location along the Puget Sound — with majestic Mt. Rainier as its backdrop — is an idyllic setting. The geography of the areas helps keep prices high, with four-bedroom homes well into the seven digits. Smaller homes, however, remain more affordable.

• 4-Bedroom Home Value: $1,218,122
• 2-Bedroom Home Value: $727,220

San Diego epitomizes the California lifestyle with its glorious beaches and sun-drenched location, cooled gently by ocean breezes. Homes seemingly do nothing but go up in the area, but there’s still a big gap between the price of the average four-bedroom and two-bedroom house.

• 4-Bedroom Home Value: $1,077,107
• 2-Bedroom Home Value: $431,930

Compared with the price of a four-bedroom house, which runs into the seven digits, a two-bedroom house in retirement-friendly Naples seems like a steal. In fact, the difference between the price of a four-bedroom and a two-bedroom home in Naples — $645,177 — is significantly more than the cost of an average two-bedroom home itself.

• 4-Bedroom Home Value: $1,352,397
• 2-Bedroom Home Value: $686,097

Oakland has a bit of a reputation as being a tough town, but that hasn’t hurt the astronomical prices of its housing market one bit. Filled with plenty of desirable sections, the city across the bay from San Francisco has sky-high four-bedroom home prices, but two-bedroom dwellings remain much more reasonable. Downsizing could put over $660,000 in your pocket.

• 4-Bedroom Home Value: $1,518,396
• 2-Bedroom Home Value: $817,715

San Jose, the capital of Silicon Valley, has the reputation as being the home of countless tech millionaires. Unsurprisingly, this pushes the price of four-bedroom houses over $1.5 million on average, making them among the most expensive in the country. But you can still snag a “deal” on a smaller, two-bedroom apartment, which can be had for close to $800,000 on average.

• 4-Bedroom Home Value: $1,914,813
• 2-Bedroom Home Value: $1,211,832

There’s no way to get around the fact that San Francisco has some of the priciest real estate in the world. At over $1.2 million for the average two-bedroom home, it’s not a place most retirees think of moving to if they’re looking to save a buck. But if you already own a four-bedroom home in the “Paris of the West,” you’re in luck — downsizing to a two-bedroom house could put more than $700,000 into your pocket.

• 4-Bedroom Home Value: $1,420,946
• 2-Bedroom Home Value: $635,615

Honolulu is one of the priciest cities in America, but it’s also in high demand, thanks to its idyllic, tropical lifestyle. There’s a huge variance in the price of four-bedroom and two-bedroom houses in the Aloha State, however, where downsizing could net you nearly $785,331 on average.

• 4-Bedroom Home Value: $1,664,646
• 2-Bedroom Home Value: $866,231

Four-bedroom homes in Irvine, lying roughly halfway between Los Angeles and San Diego, are actually the second-priciest among all major U.S. cities, topping even San Jose. But prices in this family-friendly locale drop by nearly half if you move to a two-bedroom home instead, allowing you to sock away nearly $800,000 if you make the swap.

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Methodology: For this piece GOBankingRates used Zillow’s June 2023 home value data to find where you can save the most by downsizing. First, GOBankingRates isolated the 100 largest cities by housing market, then found each of those cities (1) four-bedroom home value for June 2023. Then GOBankingRates found each cities (2) two-bedroom home value for June 2023 and then (3) the difference between the four-bedroom and two-bedroom homes. All data was collected and is up to date as of July 17, 2023.