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When Is the Right Time to ‘Right-Size’ Your Home?

Countless Americans are tightening their wallets due to increased monthly costs. Some people feel the strain of housing costs (including home insurance premiums and utility bills) while others have noticed their grocery and gas bills are going up. Inflation affects everyone but some people are impacted more than others

If you are eyeing retirement, you might be worried about how current economic trends could impact you after you leave the workforce. You aren’t alone. More Americans are considering adjusting their home sizes to meet their current needs. While this is often called “downsizing,” the reality is that these families are “right-sizing,” or moving into a house that accommodates their future plans. 

Is right-sizing for you? There are multiple benefits of moving throughout life. Learn more about this concept and how it can help you retire comfortably. 

What Are The Benefits of Right-Sizing?  

Regardless of your age, there are several benefits of right-sizing. Your needs and your finances change throughout your life and it only makes sense that you would adjust your housing to match these trends. Here are a few perks of right-sizing. 

Easier Upkeep  

Moving to a smaller property can help you save time, money, and energy on general upkeep. You will spend less time dusting, mopping, and cleaning because there are fewer rooms that need your attention. You can also spend less time landscaping if you move to a smaller plot. 

Right-sizing can benefit both older and younger homeowners. A younger homeowner might not have the skills or savings to make necessary repairs. Older homeowners might not have the ability or desire to tackle home projects (like climbing onto the roof to clean your gutters). Now might be a good time to look into a bungalow, townhome, or condo that is easier to maintain.  

Reduced Expenses 

Moving to a house that matches your budget can immediately lower your monthly costs. You will notice lower property taxes, lower monthly insurance rates, and lower utility bills. If you currently live in a neighborhood with a homeowner’s association (HOA), you can find a house with cheaper monthly fees — or no HOA fees at all. 

Some people save hundreds of dollars each month just by right-sizing their homes. This allows older homeowners to enjoy a low-stress retirement while helping younger homeowners grow their savings to prepare for life milestones like marriage, travel, children, and their own future retirement. 

More Flexibility 

Right-sizing can also give you the freedom to choose where you live. Consider moving to a coastal town where you can retire in peace. Find a cabin in the woods where you can commune with nature. It is easier to find properties within your budget when you don’t need a large home in your desired area. 

Cons of Right-Sizing 

While there are several benefits of right-sizing your home, there are a few drawbacks to consider. It’s up to you and your family to review your options and decide whether the pros outweigh the cons. 

  • You will have a smaller living space. Make sure you have enough room for your family to live comfortably. 
  • You might lose your largest real estate asset. There is always a risk that your home’s value could increase after you sell it, causing you to miss out on potential profits.
  • Your family will have to deal with the stress of moving. Packing and selling a house is exhausting and expensive – even if you are just moving down the street.     
  • This could mean giving up a family home. If you raised your kids in that house, selling means leaving a key part of your life behind. However, you will always have the memories with you. 

You don’t need to decide whether right-sizing is the best choice for your family immediately. Instead, give everyone involved in the decision time to process what a move means and how it can benefit the family. Within a few months, you can decide.  

When To Consider Right-Sizing 

Regardless of whether you are moving down the road or across the country, there are a few factors you need to consider when right-sizing. People of all ages can evaluate their current situations when making their future house plans. Use the following criteria to objectively determine whether right-sizing is the best choice for you or whether you can afford to stay in your current home.

You Spend Too Much on Housing 

First, look at your finances and calculate what percentage of your monthly income goes to housing (your mortgage or rent payment). The Department of Housing and Urban Development recommends spending no more than 30% of your monthly income on housing costs. If you spend more than 50% of your income on housing, it is considered a severe burden.

Right-sizing could bring your monthly costs below the 30% mark, freeing up your budget for additional savings or giving you spending money for hobbies, travel, and other treats.   

You’re Eating Into Your Savings 

Another indicator that you are living in a house above your means is if you are using your savings to cover basic costs. Most financial experts recommend keeping at least three to six months’ worth of expenses in your emergency fund. Do you find yourself pulling from your savings to cover your electricity bill? Are you spending more than you make each month?

This affects both new homeowners and people who are preparing for retirement. Living in a city like Seattle might seem glamorous, but make sure you can afford it.

Maintenance Is Becoming too Difficult  

If you feel overwhelmed with your home maintenance task list, it might be time to right-size. This affects homeowners from all walks of life. If you are building your career, you might not have the time and energy to take on weekend projects. If you are getting older, you might not feel safe shoveling the driveway or climbing on the roof. 

Even growing families might decide to right-size. A new baby can take away your time and budget to work on home projects. 

Your Home No Longer Suits Your Needs  

Finally, your home might have been perfect for you when you bought it, but what about now? Do you still need extra bedrooms if your kids no longer live with you or a home office if you no longer work? You might benefit from moving to a house that has fewer bedrooms and less square footage to match your current lifestyle. 

Also, evaluate whether you want a house that is easier to navigate. A home without stairs and without a steep driveway might be safer in the long run.

Alternatives to Right-Sizing  

Many people have strong connections to their homes and love where they live. If you know you need to right-size from a financial perspective but don’t want to move, consider other options. Here are a few ways to lower your expenses while staying in your home.

Take Out a Home Equity Line of Credit   

A home equity line of credit (HELOC) gives you cash based on the value of your home. It is a second mortgage that is often used to cover major expenses (like a significant home repair). You might qualify for a HELOC if you own your home outright or if you own a significant portion of your home. Talk to a financial advisor to learn more. 

Renting Out Space in Your Home 

If you have extra rooms because your kids moved out, consider looking for people to rent the space. You can either list the room on a booking site like Airbnb or look for long-term renters who sign a lease. 

While renters can provide a source of secondary income to cover your housing expenses, you also have to live with them. You might not like sharing communal areas with others or like your tenant. Plus, there’s always a risk that a tenant stops paying and you have to evict them. 


Another option for lowering your expenses is refinancing your mortgage. If you take this route, the lender will look at the current value of the house and what you owe on it. They might be able to offer a lower interest rate and lower monthly payment on the property through refinancing. 

There may be some drawbacks to choosing this option. Refinancing could change your home insurance costs, which could actually increase your monthly expenses in some areas. 

Reverse Mortgage

With a traditional mortgage, you make payments to the lender. With a reverse mortgage, the lender makes payments to you. These payments could be a lump sum, a line of credit, or standard monthly deposits.

The main criteria to qualify for a reverse mortgage is age: you need to be 62 years or older. There are other requirements related to residency and equity for your home. However, this option is growing in popularity for Americans who are able to use it. Older homeowners don’t have to worry about moving and can receive regular payments no matter how volatile the market gets. This stability is highly valued by many retirees. 

This is just one way to adjust your mortgage to prepare for retirement.

Learn more about mortgage options to choose the best one for your needs, or find a reverse mortgage loan officer near you!

Reverse mortgage borrower must occupy home as primary residence and remain current on property taxes, homeowner’s insurance, the costs of home maintenance, and any HOA fees.  

This information is intended to be general and educational in nature and should not be construed as financial advice. Consult your financial advisor before implementing financial strategies for your retirement. 

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