As you approach retirement age, one of the most important questions you must ask yourself is where to live as you grow older. According to AARP, three out of four adults aged 50+ want to live at home in retirement – and this is nothing new. Over a decade of survey data indicates that the majority of people prefer to age in place.
The problem is that most people approaching retirement don’t already live in a home that will fit their needs over the coming years. Maybe the house requires a lot of maintenance, has a lot of stairs, isn’t wheelchair accessible, or is simply too big for just one or two people. For the majority of retirement-age adults, downsizing to a smaller home becomes the logical next step.
In this article we will go over the pros and cons of downsizing in retirement as well as some considerations you should make when deciding between buying an existing home or building a custom home.
The Pros and Cons of Downsizing When You Retire
The kids are finally out on their own, and suddenly home feels a lot emptier than it used to. Rooms start to go unused, and maintaining the house seems like more work than it’s worth nowadays. Maybe it’s time to move into a smaller place. To help you decide, here are the pros and cons of downsizing.
The Pros
- Less House to Maintain: Frequent housecleaning and yard work when you have a lot of unused space can feel like a huge pain and is harder to keep up with over time. Downsizing to a smaller home will make it easier to manage, which is even more beneficial if you want to travel a lot during retirement.
- Less Expensive to Live: Smaller homes require less energy to run utilities and cost less to maintain. Downsizing also gives you the opportunity to find a home with a lower mortgage and property taxes.
- Extra Cash on Hand: If you’re able to sell your home for more than what you buy when downsizing, that can put a considerable amount of cash in your pocket. You can use this extra money to put towards hobbies, travel, or anything else you decide to pursue in retirement.
- Opportunity to Declutter: Moving is a stressful process, but it can also be a great opportunity to get rid of stuff you don’t want or need anymore. A good purge will not only make your new home easier to keep tidy, but your children will appreciate having fewer items to sort through after you’ve passed.
The Cons
- Less Space and Privacy: Now that you’re retired, you’re going to be home more often. The last thing you want is to feel suffocated by a lack of personal space and too little storage. You have to be careful not to downsize too much and realize you need more room than you thought.
- Savings Not Guaranteed: The amount of money you’ll save by downsizing can vary widely depending on the market. You will also have to factor in expenses from selling your home and moving, which can be expensive.
- Less Room to Host Guests: Smaller spaces make it harder to host guests overnight. You might miss the ability to regularly invite over friends and family now that you’ve downsized.
- Emotional Attachment: Chances are you’ve spent many fond moments and accumulated lots of sentimental items in your current home. Entering a new chapter in life is a highly emotional process, and it can be hard to physically leave behind those memories.
“Rightsizing” for Your Retirement Lifestyle
Rightsizing is a design philosophy about organizing your life in a way that prioritizes your unique wants and needs. For many people that means downsizing to a smaller home, simplifying your life, and reducing expenses. For others, it can mean buying a home that is the same size or larger but has a better layout and location. The goal of rightsizing is to strategically design your new living space so that every area has a purpose and is fully utilized.
When looking for a new home, consider the features that would help you enjoy retirement to the fullest. Maybe it’s a spacious outdoor deck, plenty of natural light, a dedicated room for your hobbies, or lots of built-in storage. When you think about downsizing (or upsizing) in terms of “rightsizing”, you can be more strategic about finding a forever home you will always love, whether that means buying an existing property or going with a custom build.
Building a Custom Home vs. Buying a Pre-Owned Home
In this housing market, it’s in your best interest to weigh every option available. Both custom and pre-built homes come with distinct advantages and disadvantages, and the correct choice entirely depends on your personal situation and preferences.
Building a Custom Home
The Pros:
- Choose Your Floorplan and Finishes: Custom and semi-custom homes offer plenty of flexibility in terms of layout and style. Choose a floorplan that fits your lifestyle and finishes that give your home a personal touch.
- Build With Accessibility in Mind: Build your home with aging in mind from the get-go rather than having to retrofit and renovate later on. Incorporate ramps, slip-resistant flooring, grab bars, accessible kitchen appliances, motion-activated lighting, and other safety features that will allow you to continue living independently.
- Low Maintenance and Updated Features: A new home is less expensive to maintain because your appliances, electrical systems, plumbing, and HVAC have never been used before. New energy-efficient equipment will help lower your utility bills and come with warranties in case you need repairs. You’ll also have the opportunity to install smart home technology that will make everyday life easier as you get older.
The Cons:
- More Expensive Process: New construction is generally more expensive than an existing home. The more premium features and materials you decide to include, the more expensive your construction costs will be.
- Slower Time to Move In: Once you decide to go custom, you’ll have to decide on a construction plan and wait for your home to be built before moving in. Unfavorable weather, a last-minute change of scope, and supply chain issues can cause unexpected delays out of your control.
- Developing Neighborhoods: Given the cost of land in established neighborhoods, it’s common to have new homes built in young developments. These areas may not yet have an established community and be farther away from city centers.
Buying an Existing Homes
The Pros:
- Greater Affordability: Existing homes often have lower mortgage rates and closing costs than new construction. Lower upfront cost alone could be the deciding factor for retirees on a budget.
- Move-in Ready: The home is already built, so your timeline to move into an existing home is much shorter than a custom build. You’re also unlikely to experience a delay unless the home needs extensive repairs or you’re planning to renovate before move-in day.
- Established Neighborhood: Preowned homes are more likely to be found in neighborhoods with mature landscaping, an established community, and easy access to grocery stores, shopping, healthcare, and recreational facilities.
The Cons:
- Limited Personalization: Available homes on the market may not fit your preferences for layout and design. Additionally, most homes aren’t designed for aging in place, so you may have to add modifications further down the line which vary widely in price.
- More Competition: More home buyers tend to go for existing homes, especially in desirable neighborhoods. You’ll face more competition and may end up in bidding wars that drive up prices.
- Higher Maintenance Costs: Preexisting wear and tear may require you to pay for home repairs and system replacements sooner rather than later. You can also expect to pay higher utility costs since older homes tend to be less energy efficient.
Gracefully Age in Place With New Era Homes
When it comes to downsizing vs. upsizing and buying a new vs. custom home, there isn’t a single right answer. It all comes down to what you value and the lifestyle you hope to lead in retirement.
If personalization and flexibility are most important to you, building a custom home is an excellent choice. With many different floorplans and finishes to choose from, New Era Homes can help you design the perfect forever home for you in retirement while keeping costs relatively low. Compared to other Bend-area home builders in our price category, we include more premium features at no additional cost.
Gracefully age in place with a beautiful new Central Oregon home designed with affordability in mind. Learn more about our unique building process and get in touch to discuss how we can help you make your ideal retirement lifestyle a reality.
