Retirement Real Estate: Should You Downsize or Age in Place?

As retirement approaches, you may find yourself wondering how and where you’ll live during your golden years. There aren’t many choices facing you in your retirement that will impact your lifestyle and well-being more than the question of what type of housing is best for you and your family. The two main choices are:

• Downsizing and selling your current home, either to move to a smaller home elsewhere, a retirement or assisted living facility, or a relative’s home (for example, moving in with an adult child); and

• Aging in place—that is, hanging on to your existing home and remaining where you are, perhaps with some modifications for safety and ease of mobility.

Which option is best for you? That’s a decision you should make after careful analysis of both the drawbacks and benefits each can offer, in light of your personal needs.

Downsizing: Lightening Your Load and Starting Fresh

Downsizing involves whittling down your belongings and choosing a smaller residence for your retirement years.

The act of downsizing can be overwhelming given the need to sort through the accumulated property and memories of a lifetime. That’s to say nothing of the actual move itself, which can be hard on older adults. You’ll also need to evaluate new potential locations and homes (or facilities) and choose a place that appeals to you and meets your needs as you age.

However, downsizing offers a number of attractive potential benefits, including:

• Lower expenses: If you choose to sell your home and buy a smaller one, either in your current town or elsewhere, you may well enjoy lower carrying costs and housing expenses. You may also minimize the need for future modifications with a new home that’s already well-configured for aging residents.
• Reduced maintenance needs: Downsizing into a smaller residence usually means that you’ll be able to spend more of your retirement enjoying life, rather than performing home maintenance and upgrades.
• Greater convenience and accessibility: As we age, we all need to consider how our changing physical realities might necessitate some adjustments in order to keep our living spaces accessible and convenient to use. A set of stairs in a two-story home might be no big deal in our 30s, but can pose a significant safety and health risk as we age. You may also want to pick a place with more walkability, or a greater concentration of medical facilities that cater to aging adults.

Aging in Place: The Comfort of the Familiar

Alternatively, you may decide to stay put in your current home, making modifications as necessary to provide support and functional assistance. While you may be saddled with the maintenance and upkeep of more space than you actually need, aging in place also offers a number of potential benefits:

• Maintaining independence: Staying put in your current home can help you feel more in control of your life and maintain your sense of independence as you transition from full-time work to retirement living.
• Familiar surroundings: Aging in place means that you can maintain the relationships with neighbors, friends, religious communities, and service providers that you’ve worked hard for so long to build and nurture.
• Freedom to modify home to your preferences: Aging in place may require home modifications, such as installing safety rails and ramps. Staying put means you get the freedom to make these modifications according to your own preferences.

As with downsizing, choosing to age in place will have a number of wide-ranging effects on all aspects of your retirement lifestyle. Make sure you consider these benefits in light of potential costs, as well as examining how closely these effects align with the way you want to live now.

Financial Considerations

Your ultimate choice will depend to a large degree on your financial assets and constraints. Downsizing means you’ll incur the substantial costs involved in moving, such as a moving company, storage space, and possibly new furniture. If you’ll need an assisted living facility, you’ll face ongoing housing costs that can quickly deplete a retirement fund.

However, you’ll also incur some costs if you decide to age in place and retrofit your home to make it safe and accessible as you age. Sometimes, these modifications can be expensive, depending on the modifications you’ll need to make. Adding a safety bar in a shower isn’t a terribly pricey project, for example, but installing a chair lift or widening all your doorways to accommodate a wheelchair may put a big dent in your retirement savings.

Lifestyle Considerations

You should also consider your lifestyle needs and preferences before you choose between downsizing and aging in place. Both of these choices can impact the way you spend your retirement years.

For example, if you move to a new home, whether it’s in a new neighborhood or an entirely new area of the country, you’ll enjoy the opportunity to make new friends and become part of an active community. However,…