Most people associate getting older with downsizing. The kids have “flown the coop,” and you might want less house to have to deal with or pay for. But, according to a recent CNBC article, many Baby Boomers are upgrading their homes instead of downsizing.
There are plenty of reasons why, from the recent pandemic to changes in spending habits. But, the trend is starting to raise questions for Baby Boomers thinking about moving to a smaller home.
What’s the real value of downsizing your home? Is there a better option for you? What makes the most sense for your age, finances, and lifestyle?
If you’re on the fence about your retirement relocation, you’re certainly not alone. Let’s cover some of the pros and cons of downsizing or upsizing it so you can make a more informed decision about where you want to spend your retirement years.
The Pros and Cons of Downsizing your Home
Your kids have left the house and you want a small, cozy place to enjoy your retirement. That’s been the stereotype for many Baby Boomers, and it’s remained that way for a reason. There are plenty of pros to downsizing your home during retirement, including:
- Less upkeep
- Energy savings
- Less financial strain
- More time for travel and things you love
- You can splurge on decorating
It might also be easier to upgrade a smaller home without having to spend a lot of time or money. Easy home improvement projects can include anything from painting the walls to upgrading light fixtures. In a small home, these tasks can seem less overwhelming, even with no DIY experience.
Another potential “pro” of downsizing at the moment is the fact that it’s a seller’s market. That means there is a greater demand for homes. So, sellers can often get the best possible listing price for their homes. You can use that money to buy a smaller home, and you may be able to buy it in full with your profit.
Unfortunately, a seller’s market can also be a “con” when it comes to downsizing. If you’re looking for a smaller home, you might find that many of them are currently in the same price range as bigger homes. Or, they might be the same as the house you’re currently selling. In those cases, it’s important to look at your lending options to decide the type of financing you’ll need to make a purchase.
Other potential drawbacks to consider include space restrictions and lifestyle changes. You might not be able to have many family members over (including grandkids) if your house isn’t big enough for them. You might also have to sell or get rid of some of your existing belongings so you can fit everything in a smaller space. If you’re a sentimental person, that can be a hard reality to face.
The Pros and Cons of Upsizing to a Larger Home
So, should you jump on board with the upsizing trend?
It’s not hard to see why so many Baby Boomers are upgrading to larger spaces. Some of the biggest (no pun intended) benefits of upsizing include:
- More bedrooms (for visiting family and friends!)
- More storage space
- Customizable rooms to fit your needs and hobbies
- Increasing the value of your home investment
Of course, some of the biggest disadvantages are extra maintenance and cost. Having to take care of a large house can add extra stress, which might impact both your physical and mental health. With one in four older adults reporting anxiety and depression over the last year, making a move to a new location should be something designed to reduce stress, not boost it.
If you’re considering upsizing, it’s important to consider not only what your needs are but how you feel. Are you up to maintaining a large house? Have you budgeted for not only a larger mortgage but higher utility bills? You might want more space, but you probably don’t want to spend your retirement years worrying about time and money. Finding a way to balance out the two will make it easier to decide if a larger house is for you.
No matter what you decide, don’t buy into trends. Upsizing might be “in style” right now. And, if you can comfortably afford it, it’s tempting to buy a house bigger than what you might need. But, that can eventually become an issue. If you don’t want to maintain a large house and you don’t expect to have many family members or friends over, upsizing can be little more than a trendy blip on the radar.
On the other hand, just because downsizing is “what seniors do,” you don’t have to fall into the stereotype. Consider some of the following signs its time to downsize:
- When your monthly housing expenses have risen over 30%
- When your budget doesn’t leave room for things you enjoy
- When you can’t keep up with home maintenance
- When you don’t need certain features within your home
- Your lifestyle doesn’t fit your neighborhood anymore
If you fall into any of those categories, downsizing could be for you. But, if you want to experience something different and have more space, try a bigger home.
No matter what you decide, you also have to consider safety. Some older homes can be beautiful, but if they were built before 1970, there may be asbestos lingering in the walls that can increase your risk of lung cancer and respiratory conditions. Every home – big and small – should go through a thorough inspection before you make a choice.
At the end of the day, this article isn’t meant to sway your decision. Downsizing or upsizing should be a personal choice. But, it’s important to be as informed as possible and consider what you might be getting into with either choice. Keep these pros and cons in mind, and think about what you need (and want!) most out of a home as you step into your retirement years.
Have you thought about downsizing your home? Or, does upsizing sound better to you? Please leave and comment below.