{"id":3100,"date":"2017-11-03T17:00:27","date_gmt":"2017-11-04T00:00:27","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=3100"},"modified":"2024-05-28T10:17:12","modified_gmt":"2024-05-28T17:17:12","slug":"downsizing-house-for-retirement","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/downsizing-house-for-retirement\/","title":{"rendered":"Ready to Retire? Pros and Cons of Downsizing House for Retirement"},"content":{"rendered":"

It\u2019s just the two of you now and your empty nest is feeling really big these days. Those four bedrooms you have to heat in the winter, the three bathrooms you need to keep clean, the hallways that echo when you speak \u2014 all of these things make you intensely aware of just how much house you own, and how much of it is currently going unused.<\/p>\n

As you approach retirement, you may be looking at the possibility of downsizing. It\u2019s not always an easy decision and the timing matters. Weigh these pros and cons before you decide to move.<\/p>\n

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Source: (Adriaan Greyling\/ Pexels)<\/figcaption><\/figure>\n

Pros to Downsizing<\/h2>\n

You\u2019ll Save Some Money<\/h3>\n

It\u2019s no easy feat to sell the home your kids grew up in, but consider all the money you can save.<\/p>\n

Home insurance costs<\/a> an average of $95 per square foot per year; maintenance costs roughly one percent of a home\u2019s price tag \u2014 so a $300,000 house might cost $3,000 per year to maintain. According to the U.S. Energy Information Administration,<\/a> the average heated square footage in Wisconsin is nearly 2,100 square feet. Why heat 2,100 square feet if you\u2019re only using 900 these days?<\/p>\n

While we could break it down with cost per square foot and average square footage per home, it\u2019s pretty simple: The bigger the house, the most it costs\u2026 in mortgage, taxes, insurance, maintenance and utilities.<\/p>\n

If your current home is paid off, you have equity, which can add a lot to your retirement assets. It may also mean you don\u2019t have to take on a mortgage if you downsize.<\/p>\n

You\u2019ll Clean Less<\/h3>\n

The pink mildew rings that show up in your toilet bowl show up whether everyone is using the hallway bathroom or nobody is using it. This means you can\u2019t get away cleaning all the bathrooms and then letting them sit while you just keep up with the one in your master.<\/p>\n

Unfortunately this concept isn\u2019t just true of the bathrooms. Dust collects on every bookshelf. Pet dander clings to all carpets. Cobwebs happen in rooms that are used regularly as well as rooms that aren\u2019t. Less space equals less cleaning.<\/p>\n

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Source: (Matthew Henry\/\u00a0<\/a>Burst<\/a>)<\/figcaption><\/figure>\n

You\u2019ll Have Fewer Loose Ends<\/h3>\n

If you have very little upkeep, it\u2019s pretty easy to book an AirBnB for the weekend or buy a flash sale flight deal and head out on a whim. This is one of the thrills of early retirement.<\/p>\n

If you\u2019re coordinating with a housekeeper, a gardener and a dog sitter however, it\u2019s a little harder to just lock up the house and jetset. A smaller place to maintain (and fewer bills to pay) translates to fewer loose ends.<\/p>\n

You\u2019ll Find More Amenities Elsewhere<\/h3>\n

There is nothing more satisfying in summer heat than someone else\u2019s pool. You get to swim in it but you don\u2019t have to check the chemicals every day or clean out the bees with the mesh net or deal with frustrating phone calls when the filter has problems.<\/p>\n

You may find, in your search for a smaller place, that there are many communities that offer a long list of amenities: pools, health and fitness centers, dog parks, etc. If you\u2019re 55+, options abound. Many of them have planned activities and tons of perks. You\u2019ll pay association dues but can wash your hands of all the maintenace.<\/p>\n

You Can Look at the Market Differently<\/h3>\n

When you bought your first house, you might have been thinking of the family you\u2019d have \u2014 the candles you\u2019d blow out around the kitchen table and the shoebox-sized bedroom you\u2019d turn into a nursery. Now, you\u2019re thinking about the moving process a little differently.<\/p>\n

You no longer have to consider factors like the school district or making sure they\u2019re plenty of room for your growing family. You can move to where you kids or grandkids are or move to where property taxes are null. You don\u2019t have to decide on a location based on a commute to work and you can stick with single-level homes only if you want.<\/p>\n

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Source (resized): (Paul VanDerWerf\/ Flickr<\/a> via Creative Commons Legal Code<\/a>)<\/figcaption><\/figure>\n

Cons to Downsizing<\/h2>\n

You Don\u2019t Have Equity or the Timing Isn\u2019t Right<\/h3>\n

If you purchased your home at the height of the market and it hasn\u2019t come back yet, now may not be the time to sell. Talk to an agent in your area<\/a> who will give you a good idea of what your local market looks like and help you forecast what it might be like in the coming months.<\/p>\n

If you sell at the wrong time, you could lose a lot of money \u2014 something you can\u2019t really afford to risk if you\u2019re now living on your retirement. If moving means you\u2019ll need to take on a mortgage, you\u2019ll also want to carefully consider the financial impact.<\/p>\n

You Have to Make Space for the Kids When They Visit<\/h3>\n

Trading the kids\u2019 bedrooms to fund your trip to Europe isn\u2019t quite as crass as it may sound. Whether they\u2019re away at college or have their own lives now, they can do without their childhood bedroom set up just as it was in high school.<\/p>\n