As I approach retirement age, I wondered if our current home was the right size home for our retirement years. Should we stay in our 2,900 square foot home on nearly 2 acres or should we downsize.
What is the Average Size of a Retirement Home? According to Southern Living, the perfect size retirement home 1500 square feet. However, a spokesperson for Pulte Homes who builds Del Webb homes in retirement communities across America says their average home size is 2200 square feet.
Along with many other couples approaching retirement, we have a choice to make – Do we want to stay in the large home like we have lived in for decades or should we look for a smaller home? Our current home is 3/4 empty for most of the year. Would it make better sense to downsize to a smaller home that is appropriately sized?
As with many retirement age home buyers, we are less concerned about having enough bedrooms for kids and visitors or living in a good school district. Should we focus on finding a home that will let us live out our retirement years and age in place?
Advantages of a Small Home
Less Expensive – A smaller house will save you money. With a lower mortgage payment, lower property taxes and smaller utility bills, a small house will help free up money to spend on other things you may want or your latest passion project. Also, if you are living on a fixed income, a smaller house will help you live below your means and give you more disposable income.
Easier to Clean and Maintain – A smaller house is easier to clean. With less dust, a cleaner home means cleaner air can help improve your health. A larger house encourages you to buy more things and more things takes more time and energy to clean and maintain. In a smaller home, you will have more free time to do the things you want to do like spending time outdoors, or with friends and family members.
Builds Relationships – In a smaller home, you will get closer to your family. Larger homes makes it easier for families to spend time apart in different parts of the house. Spending time together in a smaller space makes you closer. Since it’s harder to avoid being together in a smaller home, you learn to work around each other. Smaller homes can give you a feeling of intimacy and coziness that many larger homes lack.
Encourages You to Live More Simply – I know that I really do not need all of the things I have accumulated. A smaller house with less space will help you declutter and focus on the things you use everyday. Actually, a smaller house that is well organized will look and feel bigger while a house that is cluttered can seem cramped and even make you feel like a hoarder.
Here’s a great article with simple tips for decluttering your home.
More Energy Efficient – Because they have less square footage to cool and heat, smaller homes are more energy efficient. In addition to its energy consuming appliances and fixtures, many people forget about the amount of energy and materials that is needed to build a home. By using less energy and with fewer building materials needed during construction, a smaller home will reduce your environmental footprint.
More Free Time – A smaller home with fewer things will take less time to clean and maintain and will leave you with more free time. With more free time you will be able to pursue the things that matter most to you.
Advantages of a Large Home
According to the US Census, the average size of single-family homes built in the United States has gone from 1,660 square feet in 1973 to 2,640 square feet in 2016.
The McMansion boom that dominated suburban America during the 80s, 90s and early 2000s seems to be fading. You know them when see them. Typically they are large and cheaply constructed homes on a small lot with a very “busy” looking exterior.
There a number of benefits to living in a large home.
Room to Grow Your Family – A larger home can give you room to grow your family without having to move. However, room for a growing family is not usually a consideration when you are looking for a retirement home.
According to the Association for Community Living (ACL), in 2018 over 1.1 million grandparents living in the US were responsible for the care of one or more grandchildren under the age of 18.
Room for Guests – Having extra space for guests is a big advantage of a larger home. Whether you are entertaining or hosting friends and family, a larger home with extra bedrooms, bathrooms and living area can provide you with the extra space to comfortably host your guests.
Space for Your Home Business – Whether you pickup a new hobby in retirement, become self-employed or decide to work full or part-time at home, having extra space will make it easier to convert an extra bedroom to a home office.
Easier to Sell – Smaller homes may be more affordable than a larger home. Even so, it may be a wise financial investment to purchase a larger home. Though you might not be planning to sell you home anytime soon, a larger home is easier to sell. Spacious homes are still in high demand. Keep in mind, many home buyers are looking for extra bedrooms, bathrooms and closet space.
Other Benefits – With many older relatives living longer and families trying to save money to make ends meet, it is more and more common to find multiple generations living under one roof. Families can maintain their own space while living and sharing one larger home.
Many retirees want to live and age in place. However, maintaining a home as you get older can be a challenge. Older homeowners may not be able to do things that were once easier like climbing a ladder, pushing a lawnmower or shoveling snow.
Houses require a lot of maintenance. As a general rule of thumb, you can expect that over time home maintenance will cost about one percent of the home’s value each year. For example, with a home valued at $250,000, you should budget $2,500 a year for home maintenance.
Property Taxes and Insurance
Since property taxes are usually tied to the value of a home, retiring probably will not affect your property taxes in most cases. If you move into a smaller, less expensive home, your property taxes will probably be less. Also, in some areas, taxing authorities may offer reductions, rebates or caps on properties owned by seniors.
Homeowners insurance is needed to protect your belongings form theft, fire or damage. Not having enough or not having the right kind of homeowners insurance can have devastating consequences.
If you have a mortgage, the lending company will probably require you to have a certain minimum level of insurance to protect their investment. If your mortgage is paid off, you should review your coverage with your insurance agent or insurance company.
Consider adjusting your policy’s deductible. If you increase your deductible and your financial responsibility, the insurance company will probably give you a better rate. Also, ask for policy discounts. They may be available for homeowners:
- with a monitored security system.
- who have never made a claim.
- with good credit.
- with a homeowners association.
When shopping for homeowners insurance, be sure to keep in mind what features the insurance company offers, their claim service and any discounts they may offer.
Home ownership can be expensive and can be even more challenging in retirement. Many Americans are facing retirement with limited savings and income. Retirees can face many difficulties maintaining a home as they grow older.
How much should you spend maintaining a home in retirement? Maintaining a home can be expensive. A general rule of thumb is that over time you should plan to spend one percent of your home’s value on maintenance each year. Another good estimate would be one dollar per square foot.
How much living space does a person need? According to The Engineering Toolbox, the average person needs 200-600 square feet of space to feel comfortable in a residential home or 100-400 square feet of space to feel comfortable in an apartment. Of course, it will always depend on the person. Some