Who Should Downsize their Home?

When you think of downsizing, often empty-nesters with kids off to college may come to mind. Maybe you imagine a couple embarking on retirement who want a smaller house. In both scenarios, you are right.

However, if you think it’s only seniors who downsize their homes, you’re in for a big surprise. People of all ages are downsizing as a way to “rightsize” their lives. They’re shedding large, expensive homes for homes that are smaller, cozier, and easier (and cheaper) to maintain.

Who Downsizes Their House?

Baby boomers tend to make up the biggest share of people downsizing. Born between 1945 and 1965, most baby boomers are either in retirement or near retirement. The most common reasons for downsizing:
• Reducing the costs of maintenance and upkeep on a home that’s too large for their needs.
• Moving to a lower cost-of-living area
• Moving to an area with better services or more options for recreation
• Moving closer to their kids or grandkids
• Paying off a mortgage or other debts
• Funding their retirement accounts

It’s not just older Americans who recognize the potential benefits of downsizing. Today, many couples are opting for smaller spaces, either to accommodate career moves or simply to free up time and money to pursue other interests. What’s more, today many couples are opting not to have children, which is usually the driving factor toward buying a larger, more spacious home. Smaller homes let these couples travel more, pursue more expensive hobbies, go back to school, or even fund an entrepreneurial venture or charity.

Whether single from a death, divorce or by choice, having a large home can be more of a burden than non-marrieds want — or need. The single population in the U.S. is growing. Many of these men and women want to be able to take advantage of their lifestyles with travel or other pursuits that satisfy them professionally, artistically, or spiritually. Downsizing as a single can be a smart move following a divorce when your income may be cut in half. It can also be a wise move financially and emotionally after the passing of a spouse. Singles saddled with big student loan debts may decide to sell their homes to pay off their debts so they can start building a retirement fund or even retire early.

Many families are choosing to sell their large homes in favor of homes that are cozier and a lot less costly to maintain. While the tiny home movement may not be the ideal solution for the bulk of families, it has given parents a lot to think about regarding how they’re spending their money — and how they could better spend it to fund memories and experiences for themselves and their kids. Other parents decide to downsize to put more money away for their kids’ college funds or to pay for private school while their kids are still at home. And still, others may opt to sell a large home to free up funds that can be used to help out a cash-strapped elderly parent.

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Check out more of our information on downsizing.

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