Why Are Some Seniors Upsizing Rather than Downsizing in Retirement?

Q. My neighbors recently retired from work and put their house on the market. Their kids have all moved out, and it’s just them and their dog. At their retirement party, they showed us a picture of the house they were building. It is triple the size of their current house! I know that most retired empty nesters buy smaller homes, since it’s just them and their pet! Why would someone want to upsize in retirement, rather than downsize?

A. As people reach retirement age, it’s common to downsize and to get rid of what you don’t need. This can include personal items, extra expenses, and oversized, hard-to-manage homes and properties.

For years, the average American empty nester retiree has moved to a smaller, more manageable home, condo, or retirement community built for people aged 55-plus. Why pay for taxes and upkeep on a home that no longer fits your needs and fixed income in retirement? This was and still is the trend, but things have changed a bit in the last few years, and a new trend has emerged. Rather than following the trend of downsizing, a significant percentage of retirees actually upsize and move to bigger homes in their golden years.

Why Seniors Are Upsizing

According to a recent Merrill Lynch and Age Wave retirement study of more than 3,600 respondents, 49 percent of retirees didn’t downsize in their last move, and 30 percent actually ended up moving into larger homes. Here are some reasons why:

• Working hard and treating themselves: Many seniors who decide to retire into a larger home have worked hard their whole lives. These are the seniors who have saved a lot of money and who are now looking to treat themselves during retirement.
• A place for loved ones to stay: Whether treating themselves to a large beachfront property, a place on the lake, or a large home in a resort town, many seniors are buying a place that they can share with their extended family and friends. Many of these seniors have grandchildren and some great-grandchildren looking to visit—so now is the time to buy the place near Disney World or Rehoboth Beach where family can come and stay.
• Adult children may move back home: Adult children who are venturing back to the nest may require more room—and potential upsizing! Upsizing seniors may be buying a larger home, not only for themselves but for their loved ones to stay in, as well.
• More active lifestyles: Seniors today are healthier and more active than ever before. They are physically capable of maintaining larger properties and enjoying the benefits of spacious living.
• Increased wealth and financial stability: Today’s seniors are wealthier than previous generations. The housing shortage in various regions has led to a significant appreciation in home values in the DC Metro area and many other areas around the country, further boosting their wealth. With substantial equity in their homes, many seniors are now able to use the equity in their homes to buy their dream home and enjoy it in their retirement. Additionally, investments in equities have proven fruitful, contributing to their financial stability.
• Multigenerational housing needs: A noteworthy trend in recent years is the rise of multigenerational households, where several generations of a family live together, as described in my recent article on the subject. The growing demand for more space has prompted seniors to seek larger homes that can accommodate their multigenerational needs.
• Mortgage rates were very low: Traditionally, retirees aimed to pay off their mortgages before retiring to minimize debts while on a fixed income. However, the landscape changed due to historically low mortgage rates in recent years (which have unfortunately gone up quite a bit in the last couple of years). The over-50 crowd was seizing this opportunity to finance or refinance their homes with new 30-year mortgages, making larger homes more affordable and attractive.
• The perspective after the COVID-19 lockdown: The lockdown response to the pandemic has reshaped the way many people view their homes. After spending so much time in their homes, seniors, like many others, are re-evaluating their living spaces. The appeal of a larger home with a yard has grown significantly, leading seniors to flee smaller homes and apartments in favor of more spacious properties in suburban and rural areas.
• FOMO, or the fear of missing out, certainly comes into play with retiree upsizing. When retirees see their colleagues, friends, and family upsizing from their homes or purchasing multiple properties, they might want to do so as well and there is no time like the present!

Why Are Some Seniors Downsizing?

Despite the trend of upsizing, downsizing still remains a popular option for seniors. One of the main reasons that seniors choose to downsize is due to the fact that less maintenance is required in a smaller home. Less to clean and take care of and no stairs are definitely appealing to some aging seniors. Additionally, many seniors are downsizing to move closer to family members who may have ventured off to different areas throughout the country.

Additionally, retirement gives seniors the extra time that they have been looking for—time to catch up on reading, spending time with friends and family, and traveling. Those who plan on traveling and seeing the world may not need a bigger house, when they are often not there to enjoy it. Perhaps their children or grandchildren live in a costly metropolitan area, and a smaller home is all they can afford. Maybe they don’t want to encourage their children or grandchildren to move back home.

Another main focus for seniors who are downsizing is the extra income. Selling your home and moving into a smaller home will free up extra money to do things that maybe you couldn’t afford before.

“Right-Size” in Your Senior Years

As you retire and plan for what to do next in your life, the key is to “right-size” and make the best decision for you, your family, and your happiness! It is important to take time and carefully go over all of the factors that will significantly impact your decision, whether that be the location of extended family, finances, low-maintenance options, etc. Whatever you decide, we wish all of our readers the best in their retirement!

Planning for Retirement

Whether your retirement is coming up soon or is many years away, it is important to protect your hard work and your golden years with effective retirement planning and long-term care financial planning.

Besides being a Certified Elder Law Attorney, I am also an experienced retirement planning advisor and long-term care financial advisor through my affiliation with Protection Point Advisors.

Retirement planners, such as myself, generally work with people ages 55 and older, who are within ten to twenty years or so of their desired retirement age.

If you have not done your Estate Planning or Retirement Planning or had your Planning documents and Retirement Plan reviewed this year, please call us as soon as possible for an initial consultation or a free annual review for members of our Lifetime Protection Plan®:

To get started on retirement planning, estate planning, or long-term care planning, please contact us to make an appointment:

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