Homeowner nearing retirement says beloved house would eat 65% of costs, and downsizers weigh in

Seven years before retirement, one homeowner weighed a familiar trade-off: whether staying in a beloved house still makes sense when it could absorb about 65% of monthly spending.

Here's what to know

In Reddit's r/retirement, the homeowner said their area's steep property taxes make selling tempting. However, they explained that it would be hard to let go of their house. 

"Think it would be worth living very leanly in retirement to just stay put," they shared. "How many of you have sold your home to make retirement easier? And if you did, do you regret it?"

Responses broke into three camps: keep the house, downsize, or eliminate the mortgage.

"I don't have any problems with my house taking up that much of my income," one person said. 

But, as another noted, the obvious downside was that the homeowner would have less money to work with, which could leave them "one emergency from desperate." They added, "You'd be surprised, however, how freeing downsizing can be."

A change of scenery could also improve the original poster's lifestyle and security in other ways, putting parks, gyms, restaurants, and other amenities within walking distance.

"If I were in your shoes, I would sell and downsize," one person remarked. 

More background

There are day-to-day trade-offs that can complicate the choice of whether to sell or stay. A person who had spent 40 years in a customized two-story home described the emotional pull of remaining there, while also noting the costs of moving, including realtor commissions, closing expenses, and higher taxes on newer homes.

The downsizing recommendations also did not all look the same. Retirees described buying smaller homes outright with no mortgage, buying a condo in a walkable area, and renting. 

What can be done?

A few commenters suggested a middle ground. 

One commenter asked, "Would the [layout] of the house allow you to Airbnb or rent part of it to support the costs?" Another added, "A secondary suite can provide an additional revenue stream."

Overall, the discussion highlighted the benefit of reaching retirement without housing debt. 

But "every situation is unique," as someone pointed out, noting "there really is no one size fits all solution when it comes to making this decision."

Where can I learn more?

Housing costs, available space, and quality of life should all be considered when trying to make retirement work. But swapping a larger home for a smaller dwelling can provide unexpected benefits.

• A retired couple joined a tiny home community, cutting monthly housing costs to roughly $200.

• Homeowners who embraced moving out of traditional housing said they would never go back.

• Rising prices left would-be downsizers debating whether costly trends in housing undermine tiny-home savings.

• For homeowners craving simpler retirement, these incredible tiny homes show how far downsizing can go.

• Across the U.S., soaring premiums made homeowners insurance rates another pressure point in staying put.

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