10 Ways To Downsize Instead of Move in Retirement
Written by
Jordan Rosenfeld
Edited by
Joe Evans
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If retirement rolls around and you’re still paying a pricey mortgage, property taxes or home-related expenses, looking to more affordable locations out of state to bring costs down is tempting.
However, moving brings numerous unexpected costs, not the least of which is leaving behind communities and places you’ve developed deep ties to precisely when you’ll have the most time to enjoy them.
Before you make a geographic change, consider how you might downsize where you already are to make your retirement more affordable.
Assess Your Needs and Goals
It’s important to look carefully at your needs and goals for the future before you pick up and move elsewhere, said Rina Patel, founder of Webuyphillyhome.com.
While reducing the financial strain of a mortgage and other house-related bills is important for retirees, if you’ve spent a significant amount of time somewhere, you may have formed close-knit communities and enduring bonds with their neighbors.
“Relocating to a new town or neighborhood may require leaving behind the comforts and familiarity of one’s existing residence and beginning over. Retirees who downsize within the same community can keep their social networks intact and take [advantage] of the community’s amenities and activities,” Patel said.
Reduce Your Belongings
Patel feels one way to begin downsizing is to declutter your belongings in preparation for a change.
“It’s crucial to prioritize your belongings and only keep those with sentimental or useful worth because downsizing will leave you with less room for them. For things you no longer use or need, think about selling or donating them,” Patel said.
Prioritize Location Over Size
A smaller footprint doesn’t have to mean cramped. Patel suggests layout goes a long way toward creating a comfortable flow even in a smaller place.
“Seek a house with a layout that meets your demands and tastes, and that is also conveniently located. For instance, choose a house with accessible amenities like grab bars in the bathrooms, larger doors, and one-story living if you intend to age in place,” she said.
Be Realistic About Space
On the other hand, be realistic about the space you need, according to David Greiner, Esq., a lawyer specializing in real estate transactions.
“First, determine how much space you need. Most people overestimate. A two-bedroom condo or small house is often perfect for retirement,” Greiner said.
Compare Options
Don’t be tied to the same kind of home you live in now, Greiner urged. Explore downsizing options like condos, townhomes, patio homes and small houses in your target area.
And don’t forget to compare costs like HOA fees, property taxes and maintenance, Greiner said.
“A condo may have lower maintenance but higher HOA fees. A small house may have lower HOA fees but higher maintenance costs. Find the right balance for your budget and needs.”
Make Improvements
Another option Greiner recommends is making improvements to a smaller home to increase livability and decrease maintenance.
“Things like one-floor living, low-maintenance yards, energy-efficient appliances and age-friendly home features will make a downsized home perfect for retirement,” Greiner said.
There are also frequent resources for seniors like property tax exemptions and deductions to make downsizing even more affordable. *
Make Lifestyle Changes
Downsizing but staying in the same area may require lifestyle changes, according to Peter Evering, business development manager for Utopia Management, a California-based property management company, takes a little mental and physical adjusting.
“You just have to be comfortable with toning down your lifestyle a bit to really maximize the potential for cost savings,” Evering said.
After all, remaining in your community means not having to familiarize yourself with how to access certain amenities like transportation, shopping, healthcare and leisure.
Keep Your Eye on Local Real Estate
Another benefit of downsizing in the same area you currently live is access to local real estate, according to Martin Orefice, the CEO of Rent To Own Labs.
“You can keep an eye on home prices and mortgage rates, take your time in decluttering and packing up little-used items, and wait for your dream house to come on the market,” he said.
Look into an ADU
Perhaps you might even be ready for the smallest option, according to Sean Phillips, an accessory dwelling units (ADU) architect and builder with Otto ADU. He recommended ADUs as a great downsizing option, particularly if you’ll live alone.
“ADUs are revolutionizing retirement living in areas where they have been recently legalized,” Phillips said. “They offer an innovative solution for retirees looking to downsize without leaving their cherished neighborhoods.”
Some retirees opt to build and move into ADUs on a larger property and then rent out their main house, creating a significant income stream.
“ADUs can be tailored to fit specific lifestyle needs and accessibility requirements. ADUs offer a balance between downsizing and preserving autonomy in retirement.” Phillips explained.
These types of dwellings are versatile, relatively low-cost to build and the perfect option for folks who don’t need a lot of space but want low costs.
Plan Ahead
Most importantly, according to Chris Hoffman, a real estate agent from Lehigh Valley, Pennsylvania, is planning ahead.
“Don’t wait to make decisions. Start planning your downsizing early and set goals. For couples and families, make sure everyone is on the same page to eliminate conflicts and hurt feelings down the road,” Hoffman said.
While downsizing can feel a little scary at first, it allows you to keep the things you hold dear about your current life and free up income to truly enjoy your golden years.
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