5 Tips for Retirees Downsizing Their Homes

Updated on August 24, 2020

As a retiree, your life is dramatically different than it was 10 or 20 years ago. More than likely, you spent a good portion of your home-owning years looking for ways to afford a bigger home. However, once you retire, you’re probably ready to start thinking about downsizing.

Downsizing can make sense for retirees for several reasons. From having less yard work to take care of, to eliminating stairs that are hard on your knees, to simplifying your lifestyle so you can truly enjoy your freedom, there are many excellent reasons to consider downsizing

If you’re ready to begin the downsizing process, read on for 5 practical tips that will help you as you enter this new phase of life. 

#1 Downsizing Starts in Your Current Home

Moving into a smaller place means you aren’t going to have room for all the belongings you’ve accumulated over the years. When you begin thinking about the moving process, the best thing you can do is start minimizing immediately.

You might be surprised at how long it takes to pare down your possessions, and when you’re in the middle of a move, the last thing you want is additional stress. Whether you donate, sell, or give your possessions to family members, purging will save you time and stress in the long-run. 

As you get rid of items you no longer want or need, go ahead and start organizing items you plan to bring with you to your new home. This will make packing and unpacking easier, as it will save you a step when the time comes to make the big move

#2 Evaluate Your Current Home’s Value

Having a clear picture of exactly how much money you can expect to make from selling your current home will make figuring out how to finance your move much easier. 

For an accurate estimate of how much net cash you should expect to receive, consider the following factors:

  • How much you owe on your current mortgage
  • Home improvements you’ve made that will increase your home’s market value
  • Issues that will decrease your home’s market value 
  • Costs associated with getting your home ready to sell (painting, cleaning, staging, etc.)
  • Commission associated with hiring a real estate agent
  • HOA fees, taxes, and attorney fees
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#3 Look Into Loan Options

If you’re looking to downsize, it means you aren’t new to the mortgage process. You may already know the ropes, but you should still be sure to look into all your available options to make sure you’re getting the mortgage that’s best for you and your lifestyle. 

Below are several mortgage options for retirees: 

  • Fixed-Rate MortgageFixed-rate mortgages often make sense for retirees because of the financial stability they provide. A fixed-rate mortgage means you’ll pay the same amount of interest each month, regardless of federal interest rates. 
  • VA MortgageVA home loans are a mortgage that is offered by the Department of Veteran Affairs. This kind of mortgage is available to active and former service members, and they provide benefits such as zero down payments and low interest rates.  
  • Reverse Mortgage – Reverse mortgages are available to homeowners age 62 and older. Rather than making a payment that decreases your balance each month, the amount you owe will increase over time. This kind of mortgage is usually paid off when you sell your home. 

#4 Consider Your Lifestyle Goals

It’s important to consider your lifestyle goals when purchasing a home during any phase of life, but it’s particularly important as a retiree. You’ve spent your whole life working hard to get to where you are now, meaning it’s essential to purchase a home that aligns with the lifestyle you’ve always dreamed of.

If you don’t want to spend hour after hour doing yard work, make purchasing a home that won’t come with a lot of outdoor maintenance a priority. If the thought of climbing a flight of stairs to get to your bedroom makes your joints hurt just thinking about it, only look at single-story homes. If your goal is to spend your golden years traveling, be sure to look at options near the airport. 

#5 Calculate Your Finances Carefully 

Downsizing means you’re going to need to look at every aspect of your finances—in detail. Since you’re most likely living on a fixed monthly income, you don’t have as much wiggle room in your budget as you used to. This means you need to plan accordingly and think long-term. 

Downsizing Can Be a Big Upgrade

Although the actual process of downsizing can be a big undertaking, it’s also a fantastic way to make retirement easier and more enjoyable. By following the tips above, you can feel confident you’re going to find the perfect place to spend your next chapter. 


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