Janelle and her husband, both 68, recently retired and are ready to make the most of their golden years.
They own a condo, which originally they thought would be ideal for retirement. But now, with an active lifestyle — and more time spent babysitting their grandkids — they’re wondering if it actually makes sense to upsize during retirement.
Don’t miss
- I’m 49 years old and have nothing saved for retirement — what should I do? Don’t panic. Here are 6 of the easiest ways you can catch up (and fast)
- Robert Kiyosaki warns of a ‘Greater Depression’ coming to the US — with millions of Americans going poor. But he says these 2 ‘easy-money’ assets will bring in ‘great wealth’. How to get in now
- Gain potential quarterly income through this $1B private real estate fund — even if you’re not a millionaire. Here’s how to get started with as little as $10
Janelle spent most of her career commuting to an office, while her husband spent long stretches on the road for work. Now that they’re retired, they want to enjoy their home.
Janelle, who recently took up watercolors, wants a space to herself where she can paint — preferably a sunroom overlooking a garden. Her husband wants a ‘man cave’ where he can watch football and Formula One.
Three out of four Americans aged 50-plus want to age in place, according to AARP’s national 2024 Home and Community Preferences Survey.
For many, that means downsizing.
“Nearly half (44%) of adults aged 50-plus expect to relocate, with housing costs being a primary motivator, including rising costs of rent or mortgage (71%), property maintenance (60%) and taxes (55%),” according to the survey.
But could it make sense for some retired couples? Here’s what Janelle and her husband might want to consider before making a move.
The benefits of upsizing
Upsizing can enhance quality of life, providing more space for family visits or home-based hobbies as many retirees are “realizing their dreams” of spending more time with family and friends (58%) and pursuing hobbies (43%), according to 2024’s Annual Transamerica Retirement Survey.
It allows for flexibility along the continuum of life. It could make sense for multigenerational households — say, if you’re regularly babysitting your grandchildren, as 19% of the Transamerica survey respondents are — or if your adult children help out with caregiving duties.
Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich in America — and that ‘anyone’ can do it
It could provide space for a live-in caregiver, or serve as an extra source of income if you rent out a room, basement apartment or garden suite.
The downsides of upsizing
Moving is costly — from selling your home and buying a new one to moving costs themselves, which can range from $1,200 to $29,000, depending on how much stuff you’re moving, how far you’re moving and if you want professional movers to do the heavy lifting.
You may not net as much from your sale as you hope, meaning you may have to dip into your retirement savings or borrow money to get a bigger home.
Currently, it’s a buyers’ market, with 34% more sellers than buyers in the market, according to Redfin. As a result, it expects home prices to drop 1% by year’s end.
Meanwhile, the average 30-year mortgage rate is sitting at over 6.8%, according to data from Freddie Mac.
“High home prices and mortgage rates are scaring buyers off,” according to Redfin, while “tariff talks, layoffs and federal policy changes are among the other factors dampening homebuyer demand.”
Even if you buy a big home in a more affordable area, larger homes come with higher utility bills, maintenance and insurance costs.
If you need to hire someone for maintenance and repairs — such as regularly mowing the lawn — you’ll need to account for that in your retirement budget.
While it may be unpleasant to think about, if one spouse dies sooner than expected, or if the grandkids don’t visit as often as you counted on, then a big, empty house could also end up feeling rather lonely.
Key questions to consider before upsizing
Before upsizing, Janelle and her husband may want to answer some key questions:
- Are there other expenses we need to budget for, such as more furniture to fill a larger home?
- Can we afford this while still preserving a financial cushion for emergencies and health care?
- Are we prepared for the extra work (such as maintenance) that comes with a larger home?
- Will we still want or be able to live in a bigger space in 10 to 15 years?
- Is this larger home suitable to an aging-in-place lifestyle (e.g., are there too many stairs)?
- How will this move affect our estate plan and heirs?
Working with a financial advisor to run the numbers can help couples like Janelle and her husband determine whether upsizing would be the right move for their retirement years.
What to read next
- JPMorgan sees gold soaring to $6,000/ounce — use this 1 simple IRA trick to lock in those potential shiny gains (before it’s too late)
- This is how American car dealers use the ‘4-square method’ to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs
- Here are 5 ‘must have’ items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you?
- How much cash do you plan to keep on hand after you retire? Here are 3 of the biggest reasons you’ll need a substantial stash of savings in retirement
Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. Subscribe for free.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
