Downsizing for Retirement

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Downsizing for Retirement | Most homeowners reach a certain period in their lives when thoughts of downsizing are clear and present.

This is the time in life when all the kids have grown up and grown out of the house-the nest is empty.

If it hasn't happened already, retirement is just around the corner. Thoughts about simplifying one's life are prominent.

After living in the large family home, some empty nesters find the idea of moving to a “lock it up and leave” condo strongly appealing; others look to a smaller house.

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Downsizing for Retirement

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Downsizing has many merits for retirees and those soon to retire. For parents, there are always the kids to consider. The steep requirements now in place to patch the broken lending structure make it more difficult for first-time homebuyers to get a mortgage.

One solution for empty nesters who want to help their kids is to downsize; it's an effective way to free up the cash needed by their children for a large down payment.

Of course, selling the larger family home and buying a smaller home also allows empty nesters to build up their nest egg as they view the retirement approach.

Another very valid reason for downsizing near or after retirement, especially when the current house is a big one and so is the mortgage, is to sustain one's current lifestyle in a rough and tumble economy.

The losses that ravaged the retirement plans of many after the housing bust has led many retirees to leverage their option to downsize.

In essence, this is “selling up” to reduce debt. Buying a smaller and less expensive property helps reduce a person's mortgage, which creates a financial cushion during retirement.


Today's retirees are healthier and more active than a generation ago. Good quality of life is still very much in the picture. Living situations are also more varied, as with retirees living with children from broken marriages.

Some head into their third or fourth careers (a “working retirement”) and work from home, which calls for an office or other working area.

This calls for even more creativity and customization, which the new “small home” movement embraces to the point of being defined by these attributes.

For those who have lived several years in the family home, downsizing must be a well-prepared endeavor. Make sure that the new, smaller property will allow for what is needed both financially and from a lifestyle perspective.

The traditional equation based on income and assets for retirement planning is not enough to bank these days; retirees must also factor in lifestyle and spending.

When considering the size of your nest egg needed for retirement, no wonder why home downsizing is becoming more and more popular.

Enjoying those well-deserved golden years can be achieved with downsizing as part of the plan. Retirees who decide to downsize are more able to honor the ethical principles likely handed down to them from their parents and grandparents: useless, live within your means, and tread more lightly on the planet.

Want to learn more about planning for early retirement? Visit my website at to learn about improving the quality of life during retirement, simple living, and more.

Andrzej Kozlowski has written numerous articles on topics ranging from home downsizing to simple living. He is also editor and co-author of the book, “Living Smart: The Money Saving, Eco-Friendly Guide to Downsizing Your Home and Belongings.”

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