Downsizing When Retired: What to Consider

Ken Weingarten |

The thought of downsizing is something that may have crossed one’s mind when thinking about one’s living situation during retirement. While the obvious advantage for it is monthly costs going down, there are other factors to consider. Here, we will go over some of the pros & cons to consider if downsizing may be right for you.


Increased Cash Flow – As mentioned earlier, the lower monthly costs of downsizing can provide a lot more flexibility for ongoing expenses. For individuals with a mortgage, moving to a smaller home may also eliminate a mortgage entirely.

Accessibility – As one grows older, it may become more difficult to move around the house, especially if the current house has more than one floor. Stairs can increase the possibility of a serious injury when one has mobility issues. Moving to a smaller, one-floor home can allow one live at home longer and thus reduce the possibility of moving to an assisted-living facility.

Stress Reduction – There is always some type of maintenance work that needs to be done around the house. Having a smaller home can reduce the amount of work to be done, thus freeing up time for other activities.


Transactions Costs – In the short term, there will be some high expenses associated with the transition such as preparing the house for sale, commission & closing costs for selling the house as well as for buying the new house, and moving costs.

Sentimental Value of Current Home – The memories of one’s life in the current home is something that may be difficult to part ways with. Leaving a neighborhood behind can also be difficult. Having to start this all over again can be a difficult emotional hurdle to get over.

Furnishings – Due to a smaller space, there will likely be less room to keep household furnishings & items which may result in leaving certain things behind. This can become an additional expense as new furniture or decorations may need to be purchased.


While on the surface, it may be beneficial to consider downsizing from a financial standpoint, ultimately, the decision comes down to one’s preferences. There are, of course, tax implications when buying and selling a home which will have to be considered. This is something that is unique to every individual as there are quite a few factors to consider. If downsizing is the right move to make, it is recommended that one consult with a tax planner or financial planner to better understand the financial consequences of downsizing.

Weingarten Associates is an independent, fee-only Registered Investment Advisor in Lawrenceville, New Jersey serving Princeton, NJ as well as the Greater Mercer County/Bucks County region. We make a difference in the lives of our clients by providing them with exceptional financial planning, investment management, and tax advice.