Making the choice to downsize can be challenging and emotional. No matter what your age or what stage of life you’re in, there are many reasons to consider moving to a smaller home, such as:
- You’re seeking more financial freedom, with smaller mortgage payments and fewer maintenance costs
- Your property value has appreciated and you’re ready to cash in
- Your kids have moved out or you’re back in the office every day and you no longer need the space
- You’re struggling with home maintenance and it’s time to move into a community where such things are managed for you
Even if you’re considering one or more of these factors, it’s common—and totally understandable—for people to hold onto their larger home for longer than might make sense. Many homes are filled with memories and sentimental attachments that can overshadow frustrating inconveniences and make it very difficult to begin the process of moving, even when you know it’s time.
If you’re considering downsizing but aren’t sure you’re ready to take the plunge, consider the following questions:
- What are your goals? Are you hoping to retire soon? Do you want to travel more, or perhaps be closer to your family?
- Do you use less than 60% of your house regularly?
- Do you entertain large groups often?
- Do you use most of the items you have stored away in closets and cupboards, or do you have a lot of items you rarely or never use?
- Is your entire home accessible to you, or do stairs and other features make it difficult to access certain areas?
With these questions in mind, keep reading to discover 9 signs it’s time to downsize. Let’s jump in.
1. Your housing expenses have risen above 30% of your monthly income
Housing expenses include mortgage/rent, utilities, maintenance costs, insurance, and property taxes.
According to the U.S. Department of Housing and Urban Development, spending more than 30% of your monthly income on housing qualifies you as “financially burdened”. A significant drop in income, whether through retirement or job loss, can push you into this category. But it’s not always a loss of income that can make housing costs difficult to manage—larger homes have higher holding costs, and recent increases in property values may have pushed your property taxes above a manageable level. Regardless of why you may meet the definition of “financially burdened”, exceeding the 30% threshold is a strong sign it’s time to downsize.
Though the up-front costs of moving may be higher, moving to a smaller space means a lower cost of living in the long-term. For older adults, this can prevent the need to take on part-time work after retirement simply to maintain their home, leaving you free to travel, explore hobbies, or visit family.
2. You’re planning to retire
If you can, downsizing before you retire can help you pay for many of the up-front costs of moving. Downsizing 5-10 years before you anticipate retiring will give you money to cover your moving expenses and an extra 5-10 years to pocket any extra savings you gain from living in a smaller home, which you can use later to enjoy a cushier retirement lifestyle—or bankroll all those trips you plan to take with your free time.
3. Maintenance is becoming overwhelming
Home repairs, lawn care, and snow removal can be tedious and challenging at any age. As you get older or busier, you may find these tasks becoming more difficult to manage. Hiring help is an option, but it may be too costly to be a viable long-term solution. If the cost and physical requirements make home maintenance too difficult, it’s time to downsize.
TSI TIP: In this case, it’s better to make the decision to downsize sooner rather than later. If repairs and maintenance pile up and impact the condition of your home, your property value may decrease and you may not get as good a price when you do decide to sell.
4. Your home’s value has increased
If your home’s value has increased steadily over the years, selling it while the value is high can help you boost your retirement savings or kickstart your post-retirement travel nest egg.
5. Your home no longer suits your needs
According to the AARP, 77% of adults over the age of 50 hope to age in place in their current home. While you may share this vision, you may also find that more challenges pop up as you age, such as:
- Stairs might become difficult to climb
- Your driveway may be too steep to safely traverse in the snow or ice
- Snow clearing could become difficult or impossible
- Cabinets and storage may be harder to access
- Landscaping may become too high maintenance
- Showers and bathtubs may not be easily accessible
- Doors and hallways may not be wide enough to accommodate new mobility devices
Many seniors opt to downsize to a one-level home to limit the impact of current or future mobility limitations. If aging in place isn’t a concern for you, perhaps you simply no longer need all four of those bedrooms now that your kids have left the nest, or your home office has been abandoned post-retirement. Whatever the case, why spend money heating, cooling, and lighting empty, unused space when it’s not needed? If your current home no longer suits your lifestyle, it may be time to sell and move somewhere smaller.
6. You have the option to live anywhere
If you are retired, work remotely, or your children have left the nest, it may be time to consider moving to a new neighborhood, or even a new state, with a lower cost of living—or somewhere that is closer to family, has a more pleasant climate, or makes travel easier.
7. Your lifestyle is changing
Retirement, divorce, a new career, or a newly empty nest all represent major lifestyle changes that may inspire a move to a smaller home to help reduce costs and maintenance requirements.
8. You travel a lot
Why maintain a larger home if you’re regularly away visiting family or traveling for work or pleasure? If you’re often away from home, downsizing to a smaller place can help free up more cash to support your wanderlust. It also means less home maintenance to worry about while you’re away.
9. Your neighborhood has changed
If you’ve watched your neighbors and friends leave and you’re surrounded by new neighbors who don’t match your lifestyle—young families, for example, while you’re gearing down to retire—downsizing and moving somewhere with neighbors at a similar stage of life can help you make new social connections.
3 Signs You Should Stay Where You Are
Downsizing isn’t always the right choice, even if you’re preparing to retire in the near future. If you’re on the fence about making the move to a smaller home, these three factors may help you make the choice to stay or go:
- Your home’s value is increasing rapidly. If your home’s value is on a rapid ascent, you might be better off waiting till the market stabilizes to maximize your home’s value.
- You regularly entertain large groups. Just because your kids are gone doesn’t mean your spare room doesn’t get any use! If you often host large groups or have overnight guests, there may be no rush to downsize to a smaller space.
- Your kids are still in college. High housing costs and low wage growth are forcing more adult-aged children to live at home for longer. If your kids are still in college and you don’t have another pressing reason to downsize, you may want to hold off on downsizing until you’re sure they won’t need to move back in.
Downsizing can reduce your cost of living and make home maintenance easier to manage. Whether you’re considering downsizing because of retirement, job loss, or changes in your lifestyle, moving to a smaller home can provide the freedom you need to enjoy your retirement or manage other life changes.
Ready to downsize?
TSI can help with everything from decluttering and planning your move to unpacking and settling you in.