Broker Check

Is It Time to Downsize Your Home?

| June 04, 2021

June Client Letter: Is it Time to Downsize Your Home?

Did you buy your home many years ago? Or have you been in your current place for just a few years?

There are plenty of reasons to sell and seek out a house that is smaller and one that fits your lifestyle. On the flip side, there are reasons you may want to stay in your home.

Now that you are in retirement or are nearing retirement, the mortgage may be paid off or you might have a significant equity stake in your primary residence.

Much goes into a decision to sell your home, and the process may seem daunting if you have lived in your house for years.

Here are some questions to think about.

  • If we move, where do we want to buy? What are housing costs in my neighborhood versus an area we are considering?
  • Do I want to be near family members? Which ones?
  • Should we pay off the mortgage?
  • What are the services that will be available in the area we are considering? What amenities are important to us, including restaurants, shops, recreation and entertainment?
  • Are the medical services I need readily accessible?
  • Do we need the equity in our home to help with retirement?
  • Does the emotional attachment to our home we’ve lived in for many years outweigh the advantages of a new home?
  • Do I want to consider a retirement community?

Let’s look at some of the advantages and disadvantages of moving and downsizing. These ideas are not all-inclusive but will help organize your thoughts.

Reasons you might consider downsizing.

  1. The number one reason why people downsize is to save money, according to a survey by com. Baby boomers, Generation X, and millennials all ranked it as the top reason.

If you are still paying on your mortgage, sale of your primary residence could wipe out your debt and leave you with cash. That’s cash you may put towards retirement, travel, savings, or any number of items.

A smaller home that’s better adapted to your lifestyle may also reduce expenses such as utilities, further reducing your monthly cash outflow. Reducing your monthly upkeep gives you options. It will allow you to either save money or spend on lifestyle choices that are fun and enrich retirement.

If you are paying over 30% of your income on housing and maintenance, you might consider a home that puts less pressure on your budget.

  1. My current place is too big. In the same survey, “my home is too big/previous space is too hard to clean or maintain” were cited as the number two and number three reasons to downsize. 

Not surprisingly, boomers saw this as a more important factor.

  1. Your current house no longer meets your needs. The large yard for the kids contains special memories, but upkeep has become a hassle. Or, it’s becoming increasingly difficult to shovel snow off the long driveway, and cleaning rooms and bathrooms that are rarely used is time-consuming.

What about stairs? You enjoy having the distance and solitude of a second floor, but you now find that stairs are becoming increasingly challenging. The thought of having everything on one floor has become increasingly appealing.

  1. You are the oldest person in your neighborhood. Young families keep you young. However, many of the neighbors you shared holidays and meals with have moved away. The families that made your neighborhood “your neighborhood” are gone.

Is it time to consider a retirement community with an active association that might reduce the loneliness that sometimes accompanies retirement?

  1. Your career and company no longer dictate where you live. Younger folks may have the option to telecommute, while those in retirement may no longer be tied to the city and state where they live. Are there new locations you might consider?

A new adventure is always exciting. You are an explorer in a new land. But there are always drawbacks to any proposition you are considering. Let’s go in with our eyes open.

Potential drawbacks to downsizing.

  1. We tend to overestimate the value of our home. This is common. “Did you see what the Smith’s sold their home for? Our home is so much more appealing.” That may be the case, but what you value may or may not translate into a higher sales price.

Various sites online can help you estimate the value of your home, but these are simply ballpark estimates. A good realtor can help you realistically estimate the value of your home.

  1. Conversely, we tend to underestimate the cost of a new home. The latest upgrades in a kitchen and master bathroom will add to the cost of a new house. Plus, that extra bedroom could come in handy for guests or make the perfect office. Sure, they may be worth it, but let’s budget for them.

If you are considering a new home, a smaller place can reduce utilities, but factor in the cost of a monthly HOA if the community you are interested in is governed by one.

  1. Will you owe taxes? Most individuals and couples can exclude the first $250,000 and $500,000, respectively in profits from taxes. Generally speaking, you must have owned the house and have used it as your primary residence over the last two years.

As with any tax matters, complexities may arise. Please feel free to consult with your tax advisor.

  1. Factor in the costs to move. Moving is not cheap. You will have expenses related to selling your home, buying a new home, and moving to a new location.

According to, the average cost of a long distance move is $4,890, based on a two to three-bedroom move of approximately 7,500 pounds with a distance of 1,000 miles.

Recently we had clients moved to Florida for their retirement years and the cost to move was almost $8,000. I suspect that had more stuff. The point being the cost varies greatly, so you need to get quotes in order to accurately factor in the correct costs.

  1. Time to declutter. You may look forward to downsizing, but that means less space for your pictures, art, furniture, heirlooms, and more. Parting with long-term possessions can be a difficult process for some folks.

This is such a difficult process. My parents spent over 6 months going through the downsizing process. It’s amazing how much stuff you forget you have when you lived there 30 to 40 years. I have had several clients go through the same process and in some cases, it took even longer. Timelines are important when you move so having enough time to get through the declutter process is critically important. Also, there will be some struggles in gaining agreement on what stays and what goes. Just be prepared for that.

  1. Less space may feel cramped. Do you entertain friends and family often? Have you become accustomed to extra space? Do you sometimes have overnight guests?

You may miss the big family room or dining room in smaller quarters, and you’ll have less space when family or friends join you for an extended visit. Thanksgiving dinner will likely get moved to another family members home. Now that might be a blessing when you consider the work and effort that goes into Thanksgiving.

When my parents downsized it meant that when we visited them we needed to stay in a hotel. They did not have any place for us to stay. They really had not considered that. While they could not have done anything different it is something you need to recognize.

Many folks will decide to stay in their home. For others, a change is welcome. Our goal is to help provide you with some of the advantages and drawbacks as you consider a life-changing decision.


Thinking about the markets and the economy

Table 1: Key Index Returns




Dow Jones Industrial Average



NASDAQ Composite



S&P 500 Index



Russell 2000 Index



MSCI World ex-USA*



MSCI Emerging Markets*



Bloomberg Barclays US Aggregate Bond Total Return



Source:, Bloomberg, MarketWatch

MTD: returns: Apr 30, 2021—May 28, 2021

YTD returns: Dec 31, 2020—May 28, 2021

*in US dollars


Inflation worries surface

Inflation has not been a persistent and serious threat to the economy since the 1970s and early 1980s.

The Fed knows how to defeat inflation. Raise interest rates to onerous levels and quash demand in the economy via a serious recession. In turn, companies lose the ability to rapidly boost prices, and employees no longer have the leverage to demand outsized wage hikes.

We don’t want to repeat that cycle.

At a minimum, however, we are starting to see upward pressure on prices. How long might this last?

The Consumer Price Index jumped 0.8% in April. Remove food and energy, and so-called core inflation surged 0.9%, the fastest reading in 40 years (U.S. BLS, St. Louis Federal Reserve).

Fed officials continue to insist any increase will be “transitory,” their word of choice in describing what they see as a temporary rise in prices tied to the reopening of the economy.

That may be the case for hotels and airlines that are set to see a jump in summer bookings.

But there are issues that are influencing pricing decisions on the production side of the economy, too.

We have learned that huge cash infusions via government stimulus will boost demand. We are seeing it in record retail sales reported monthly by the U.S. Census Bureau. Yet, production has been much slower to rebound.

A May 13th story in the Wall Street Journal, “Empty Lots, Angry Customers: Semiconductor Crisis (Shortages) Throws Wrench Into Car Business,” sums up what’s happening in the auto industry and highlights the problems auto buyers are facing.  Or here is another look from a May 11th CNBC feature: “U.S. Faces Major Shortages in Everything From Labor to Semiconductors, Lumber and Packaging Material.”

Anyone that has looked in to remodeling their home or building a new one have been shocked by the unheard of price increases for materials.

In April, the National Association of Homebuilders said that lumber shortages are leading to skyrocketing lumber prices, adding an average of $36,000 to the cost of a new home over the last year.

Government spending and a super accommodative Federal Reserve argue for a more permanent and unwanted rise in inflation. However, longer-term disinflationary trends, i.e., demographic trends and globalization, remain in place. Further, labor unions, which helped drive a wage/price spiral in the 1970s, don’t have the power they once had.

Where do we stand? There are reputable economists on both sides of the inflation debate. No one wants to see a return to the double-digit inflation problems of the 1970s, and the Fed is more likely to react than was the case a generation ago.

But we don’t expect the Fed to lift interest rates anytime soon, as central bankers continue to insist their focus is on full employment, and any rise in pricing pressures is temporary. Nonetheless, the best news on inflation is probably behind us.

Recently I read where Uncle Sam is now borrowing fifty cents for every dollar they spend. Wow let that sink in for a moment. If we believe that to be true then rising interest rates is the last thing Uncle Sam wants.

I trust you’ve found this review to be educational and informative.  

Let me emphasize that it is my job to assist you. If you have any questions or would like to discuss any matters, please feel free to give me or any of my team members a call.

As always, I’m honored and humbled that you have given me the opportunity to serve as your financial advisor.


Kind Regards,


Niles P. Geary, II, MBA, CRPC, AIF™ 

Co-Founder & CEO 

Niles P. Geary, II is Registered Representative offering Securities and Advisory Services through UNITED PLANNERS FINANCIAL SERVICES, A Limited Partnership Member: FINRA, SIPC Voyage Partners Financial Strategies, LLC and United Planners are not affiliated. 

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