Retirement Downsizing: What You Need to Know Before You Go

Ah, retirement. The good life. No more alarms to startle you awake in the morning. No more long hours stuck in rush-hour traffic. And those hair-on-fire meetings? They’re someone else’s problem. Instead, there’s endless time to travel, see family, pursue hobbies, volunteer for your favorite causes — and just kick back and relax. Yep, this is the vision you have of retirement. And it shimmers like Shangri-La on the horizon, right? 

Although the road to get there is getting shorter — and the daydreaming is getting longer — we all know it still takes some planning and preparation to bring this vision to life. And if you’re like a lot of people, downsizing is part of that picture. Because who can keep up with a house full of stuff when there are new roads to explore? If that sounds like you, read on: We’ve got the lowdown on retirement downsizing to help sort it all out.

From timing to purging to storing, here are all the downsizing details:

At what age should seniors downsize? 

65 isn’t the magic number anymore when it comes to retirement. And the same is true when it comes to finding the right time to downsize. Sure, downsizing in your 60s is common, but many people are beginning to downsize even earlier. For instance, in 2020, about 28% of all transactions could be characterized by downsizing, according to Lawrence Yun, chief economist at the National Association of Realtors. And the majority of those buyers were 55 and older. 

It’s a matter of personal preference and finances, for sure — heck, even how you define “senior” may be up for discussion. 

What should you consider before downsizing for retirement?

Unfortunately, you can’t just snap your fingers and suddenly be free of your superfluous belongings and unused square footage. Downsizing will take some time. So to help you determine when it’s the right time to make the move, here are some considerations to take into account.

Finances 
No-brainer, huh? Financial considerations are definitely one of the primary catalysts for seniors making the move to a smaller home. And if you’re like a lot of people these days, trying to keep up with rising costs is likely getting you down. Some folks are able to navigate through temporary money woes, knowing that in the long run they’ll be just fine. But when the cost of your housing gets to be 30% or more of your income, you should consider a move — senior or not. At that point, according to Harvard University’s “State of the Nation’s Housing 2020” report, you are “housing cost burdened.” Devote more than 50% to housing costs and you’re considered “severely cost burdened.” Time to move! 

If you’re interested in seeing Harvard’s “State of the Nation’s Housing 2022” report, it will be published June 22nd.

Retirement Date 
It’s the life marker that logically spurs thoughts of moving and downsizing. Do you live in your current home because of its proximity to the office? Have you only considered certain areas because of work obligations? Retiring will open up your options for places to live. And, generally, clocking out for the last time means an end to the schedules you’re accustomed to — and perhaps the start of new routines. So, naturally, the day you hang ‘em up will influence when you decide it’s time to downsize. 

Insider Tip: Not quite ready to start counting down the days? You can still get prepared! Start putting dedicated savings aside now so you’re ready when the time actually comes, and start decluttering your home little by little so you’re not hit with a massive undertaking a week before the movers are scheduled to arrive.

Empty Space in Your Home 
In a home, an empty room not only gives a sentimental empty-nester the blues, but it also wastes energy, money, and other resources. Think about the air conditioning or heat pumped into the kids’ empty rooms all day, every day; the water required to keep the plumbing in working order in the commode, tub, and sinks; and the basic maintenance needed to keep the rooms free of dust. Downsizing to reconfigure your living space is a smart move that ensures all of your square feet are put to good use and use energy efficiently.

How Much Maintenance You Want to Take On 
What were once easy-peasy now seem insurmountable — like all that weeding and mowing to keep the landscape presentable, changing the A/C filters, moving decorations in and out of their storage spaces in the attic or basement. All of these to-dos require a certain measure of physical exertion that, after 50 years or so, might just make you want to hang up the handyman (or handywoman) belt and find a no-maintenance community — like a cozy apartment on the beach.

Stairs, Stoops, and Shelves 
If you’re having mobility challenges getting up stairs or reaching high spaces, a single-story home or condo built with accessibility in mind might be the best bet. 

Should you downsize before retirement?

The answer to this question depends on a few important factors — some practical and some emotional, so consider the following:

• You may be more “up for the challenge” if you start sooner rather than later.
  Doing the work of downsizing — and there is work involved, don’t kid yourself — is certainly less arduous for active, healthy people who have minimal ailments that tend to pop up in later years. So in that regard, the earlier you downsize, the better. 

• Payments will be easier while you still have income coming in.
  You’re also going to face a flood of financial considerations throughout the downsizing process, not least of which is the massive uptick in home prices in the past year — and it’s not over yet: Zillow predicts another 11.6% spike in home value growth from May 2022 to April 2023. Other costs you’ll have to deal with include:
  • Real estate fees: Agents, lawyers, and the IRS like to get paid during real estate transactions.
  • Moving costs: Full-service movers can get pricey. And if you go the DIY route, at the very least, you’ll need boxes, supplies, and money to gas up the truck.

• Going slow and steady may be a better approach across the board.
  In the emotional realm, making a momentous change that disrupts pretty much every aspect of your life might proceed more smoothly if you’re still entrenched in familiar habits. Retirement downsizing, wrapping up your working life, and selling your home are all potential shocks to the system. Perhaps one at a time is a wiser approach. 

If that resonates with you, consider creating a strategy that kicks off your home downsizing concurrently with planning for retirement. You’ll have plenty of time to adjust to the idea — and your new home — before your colleagues throw that last conference room party. And you’ll have lots of opportunities to sort through your belongings and determine what to keep and what to discard. Which leads us to …

How do you decide what to get rid of when you downsize?

This could be the most disruptive part of the entire downsizing process. Not many people are fond of discarding things they’ve accumulated as part of their home — but it’s a necessary step, and there are ways to make it less stressful. Here’s how to start:

• Take inventory: How you do this doesn’t really matter — spreadsheet or sticky notes, just find some way to make a list of the things you own. Go room to room, and don’t forget the attic, basement, and garage. When you finish, you might be surprised to find you have duplicates of items, which will make the purging process that much easier.
  
• Do not keep everything: The point of downsizing is to make life more manageable. Less clutter, more serenity. A few things to definitely throw out, give away, or shred include:
  • Clothing that doesn’t fit or you haven’t worn within the past six months.
  • Tax records that are more than seven years old.
  • Knick knacks that have been stored away in a box somewhere.
    
• Have a yard sale: Find happy homes for the precious belongings you’re not going to take to the new home. Just make sure your things are all priced to move; waking up the next day with just as much stuff defeats the purpose. And don’t be offended to find no one enamored with that green velvet beanbag chair or the collection of ‘80s concert posters you couldn’t bear to let go of until now.
  
• Save for your kids: If you want to gift larger pieces to children or grandchildren but you don’t think they’re ready to receive them (too young perhaps?), you can load everything in a PODS container and store it in one of our secure PODS Storage Centers for as long as you’d like. When you’re ready, we can transport it directly to your family members — whether they’re a few streets away or across the country.
  
• Donate to a community shelter: You will definitely have things leftover when it’s all said and done. That’s just the way the cookie crumbles. If you can, put them to good use for families in need, particularly clothing, toys, and children’s books. The best part? You can have peace knowing that the items will help create new, lasting memories for others.
  

Haven’t quite decided where to settle down after your downsize? Check out the PODS Blog for a look at where people are moving in 2022; the 10 best places to retire; and the pros and cons of apartments, townhouses, and condos.

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Shannon Jacobs is a Tampa-based freelance writer and frequent contributor to the PODS Blog. She has lived in Atlanta, the Berkshires, and Nashville, but always returns to the warmth of Florida’s Gulf Coast.