Downsizing and Rightsizing: How to Simplify Your Life in Retirement

Part of retirement means re-evaluating your needs and transitioning to a new chapter of life. This downsizing process can be emotional as well as beautiful. Evaluating what you need out of your home can be one of the most freeing and stressful tasks.

When you first buy a home, you plan for a family and a vibrant career. You looked for rooms for your children, maybe a backyard for a dog (or even some chickens). If you’re lucky, maybe you invested in a home office or studio for your side projects.

You bought a car for errands and trips to visit the grandkids, and you keep it in the garage with all the materials you need to tend to your home and hobbies.

These things served concrete purposes at one point in your life, but their importance might start to fade in retirement. Perhaps many begin to become a drain on your time and money.

Whether you downsize, sell your things, move to a more straightforward home, or “rightsize,” to find a home that works better for your new lifestyle, there are many factors to consider. From where you want to live to how to decide what to get rid of, downsizing can seem daunting, but let’s take it one step at a time.

The Benefits of Downsizing and Rightsizing

Downsizing can save you money and free up space for new adventures. Extra space and extra items are not only wasteful, but they can cost you more money and prevent you from pursuing your goals.

Heating Bills

Downsizing can save you from costly home repairs and unnecessary bills. For example, the average cost of heating a home in America comes close to $1,452 per year, according to the U.S. Energy Information Administration. And, if you have extra rooms, you could end up paying extra to heat the space even if you keep the thermostat low. This means that if you have space you are not using, you’re basically burning money. Extra rooms could also lead to water leaks or termites going unnoticed and causing long-term damage that costs you dearly.

Rental Income

Downsizing doesn’t just save you money; it can make you money to pursue new goals. If you own your home, you stand to gain a lot from selling or renting your property if you’re not quite ready. Perhaps you want some cash to help you travel the world, or you need an investment to start a new business; either way, your home could finance your next chapter.

Changing Needs

Of course, life is not all about the money. Rightsizing helps you align your lifestyle with your values and goals in retirement. Yes, needs change over time. While owning a home made sense at one point that property might be holding you back. Moving to a smaller apartment closer to family or moving into a retirement community could help you form more meaningful connections.

Moving closer to the mountains could help you get more fresh air and keep your body moving. If you’re a free spirit, retirement might be the time to get rid of all your possessions and travel the world.

Considerations Before Downsizing or Rightsizing

Before you start trying to sell your home and start your next chapter, you must evaluate your values and goals to help you decide what will be right for you. Sit down with a journal, a friend or your partner and talk seriously about what the next years of your life might look like. You can ask yourself: How much time will you spend at home? Who do you want to spend time with? What do you want to spend your days doing?

Once you know what changes you need to make, determine when you might be ready to make them. For instance, you might not feel prepared to let go of your family home, but you do feel ready to start a new hobby or business endeavor.

In this case, you might choose to rent out one of your rooms. With limited housing availability, rental prices are rising in cities across the U.S. If you rent out a room or rent your entire home, you could make a decent amount of money and even make some new connections.

If renting to strangers doesn’t sound like your ideal retirement situation, you could also buy some time with a reverse mortgage or sell your house to your kids and rent it from them.

Practical Tips for Decluttering

Regardless of which situation makes the most sense for you, decluttering your space will be an essential first step. Start with the parts of your home that you use the least. Maybe your garage is full of projects you never quite finished, or your attic still has all of your sweaters from high school; you can begin by taking an afternoon off and start sorting things into piles.

Start Small

If those spaces feel too daunting, one closet or one drawer might be enough to get you started. When a task feels too hard and emotionally draining, we tend to avoid it. However, psychologists have found that we can trick our minds into doing the big tasks if we break it up into small chunks and attack the task bit by bit.

Ask the Experts

Expert strategies can also help with decluttering. In addition to classics like Marie Kondo’s KonMari, you could use a “four-box method” — one for trash, one to donate, one to keep, and one to relocate. If you want to start small, but hit every room, you could try the “five item rule” and pick five items from every room to donate or throw away.

Take Your Time

Decluttering does not have to happen overnight. If you start preparing early, you can take time to see what items you really use. To help decide what clothing to get rid of, turn all your hangers backward and only turn them the right way around once you’ve used the clothing. If you haven’t worn something after a year, consider donating it.

Finally, remember that decluttering not only benefits you, but it can benefit others. While the chairs in your living room sit gathering dust most of the time, they could be in a child’s bedroom, acting as their very first desk chair. Giving things away gives them a second life.

Navigating Home Sales

Once you’ve decluttered your life, you might be ready for your new space. While the housing market will always be complicated, it can be even more complex in retirement and require some extra work.

If you’ve owned your home for over a decade, some of the wonderful, modern features you loved might be outdated. Putting in some additional work upfront could help get you a better price in the long run. You may want to look at the other listings in your neighborhood to get a feel for the potential price range and the competing houses before you get too excited about moving out.

While you may think it’s smart to save the 5–6% realtor fee and sell your home yourself, finding a realtor will likely make you more money in the end and save you headaches. Realtors can help avoid emotional sales, screen unqualified buyers, protect against legal risks, and access larger networks of customers.

Selecting Your New Home

When thinking about downsizing and where to move, you can start with the fun questions like what type of community do you want to be a part of? Americans are lonelier than ever and opting into more intentional communities can bring you joy as well as extend your life, given that loneliness can increase mortality by 26%.

Once you know what type of home you’d like to live in, you may need to consider your budget and your financing options. If you can plan ahead, you should consider investing in your retirement home before you retire.

You’re more likely to be approved for a mortgage while working full-time. If you can afford to pay off a second mortgage, you could save yourself a headache down the line. On the other hand, renting a place gives you more flexibility and should come with less maintenance.

Finally, you should consider long-term care. How accessible is the space? The older you get, the fewer stairs you will want to climb. Do you live near others who can take care of you if you get hurt? What is medical care like in your area?

Do you live somewhere with good options for nursing homes or more long-term care when the time comes? While these things may not be fun to consider, they will help reduce the number of times you need to move.

Adjusting to a Smaller Living Space

Having a smaller home might not be all sunshine and rainbows, especially if you live with a partner, or a pet or you have a lot of things you couldn’t quite give away. Once you know exactly how much space you have and how much stuff you need to put into it, you must get organized.

As you select your smaller living space, think about your needs vs your wants. If you have a pet, maybe you need a small backyard or a pet-friendly apartment. However, if you like the sun, maybe you just want to make sure you live near a park with a bench. If you choose a communal living space, you could prioritize your bedroom and bathroom while spending meals and leisure time in the common areas with your friends.

Regardless of where you end up, New York City designers, tiny home builders, and practical furniture companies have all kinds of solutions for small spaces. Mirrors, windows, and natural light make a space feel bigger than it is.

Multi-use furniture, such as benches that flip open, and couches that turn into beds or tables where all the chairs slide neatly underneath, help to maximize storage space. If you need inspiration for a particularly tiny space, you might look to van life influencers that manage to fit an entire world into the back of a car.

New Chapter, New Space

This phase of your life will look different, which can be amazing. Imagine living in a dorm with all your best friends, where you spend your days playing games and discussing your favorite movies.

Or maybe you have a room in your daughter’s home, and you get to babysit your grandkids every weekend. Perhaps you live in a camper van and sell your paintings as you drive around the U.S.

Regardless of where you see yourself, you may need to let go of some things to get there. From decluttering your space to selling your home, you will need patience and good guidance to let go of the past and step into your future.

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