Retirement Retired Life

12 Reasons It Can Be a Bad Idea To Downsize in Retirement

Downsizing and living in an RV sounds fun, but it's not for everyone.

By Cat Lafuente

Edited by Esther Carlstone

Updated Jan. 22, 2025

Conventional wisdom often suggests downsizing your home as you prepare for retirement. This advice is most often directed at couples who, after the children have left the nest, find themselves living in a large house with empty bedrooms.

For as much as some people love downsizing into a condo or even an RV, it's not right for everyone, and that's okay. Here are 12 valid reasons for staying in your home as you age.

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Your home may be worth less than you think

With the mortgage paid off and years spent in your home, you might be tempted to think your property will fetch a small fortune. Maybe some neighbors got a great offer, too.

The housing market is anything but static, though, so it's within the realm of possibility you'll net less on your home sale than you think.

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You may have to pay taxes on your home sale

Couples are exempt from taxes on the first $500,000 of profit of a home sale and singles $250,000. But if you make more than that, that's when the IRS comes knocking.

How long you've lived in a place is also a factor when accounting for taxes, so read the fine print.

There are closing costs to consider

In addition to potential taxes, there are closing costs that everyone has to pay when selling a property. These include fees for attorneys, appraisals, inspections, and more.

You also have to pay your realtor's commission, which can be quite substantial, especially if your home sells at a high price.

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Your retirement destination may be expensive

Many retirees dream of escaping chilly Northern or Midwest locals and moving to sunny Florida or elsewhere in the Sunbelt. Maybe you've even had your eye on The Villages for decades.

Housing throughout the Sunbelt has gotten much more expensive in recent years, however, which may make a move to the area cost-prohibitive.

You may need to pay for storage

Just because you downsize doesn't mean you let go of all of your possessions, especially if you're the sentimental type. That means you're going to pick up a storage payment every month.

The more storage you use, the more you'll pay, especially if you have large items that need climate control.

Moving is expensive (and exhausting)

We've all moved at some point in our lives, which means we all know how expensive and exhausting it is. The more stuff you have, the more of both it will be, too.

It's likely more expensive than you remember, especially if you've lived in one place for decades. Then you have to start all over in a new place on top of everything else.

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You could make money renting out space

If you have a knack for hosting and enjoy meeting new people, you can rent out some of those empty bedrooms on a short-term rental site. It's a great way to supplement your income.

Or if you're less social, you can convert part of your home into a separate unattached space to rent out, such as a backyard cottage.

You may miss all of that extra space

On the flip side, maybe you've been able to spread out in your home and make use of those extra rooms. Perhaps you have an art studio, an office, or an exercise room to enjoy.

Downsizing means having less space — often a lot less. That's something you might miss, especially in an RV.

You may need intergenerational living space

The cost of housing is higher than ever, which has a lot of young people moving back in with their parents. Even when they do everything "right," it's exceedingly common.

Or you may have aging relatives who need to move in with you. In either case, you'll be glad you didn't downsize when they become your roommates.

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Your home may already be ADA-compliant

If you've already modified your home to accommodate people with mobility issues, it can be a good idea to age in place. Many people need such accommodations as they get older.

If you haven't made these additions to your home, it's easier to make such renovations in a large house than it is a condo or an RV.

You don't want to give up your lawn or garden

Downsizing doesn't just mean giving up indoor space, you also likely sacrifice that large lawn or elaborate garden you've tended for years.

This is also something to consider if you have dogs or other pets that enjoy having lots of land to run around on.

You simply love where you live

If you're happy where you are, stay where you are. Maybe that means you have friends and family nearby or you have doctors you trust and a network of support established.

Perhaps you just love your house and have many happy memories there, so why would you leave? The good news is that you don't have to.

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Bottom line

We all want to avoid wasting money in retirement. To that end, if you don't want to downsize, don't. There are plenty of reasons not to.

Retirement isn't a one-size-fits-all time in our lives, as different people want different things. So if you want to make that cross-country trip in an RV, go for it. If you want to stay nearby to watch the grandkids, do it. It's all up to you.

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