Downsizing Your Home for Retirement: A Guide for Homeowners
Most traditional homes that we have lived in throughout their lives aren’t necessarily well suited for us as we age. As the years go by, older adults often find that their home no longer fits their needs or lifestyle. The costs, time, and physical labor required to maintain the house becomes overwhelming.
You realize that a change is necessary, but where do you start?
The process may seem overwhelming, but taken step by step, it’s manageable. You can do it, and we hope this guide will help you figure out how to downsize your home.
After years of working with individuals and families in this situation, we would like to offer you a few tips that we’ve learned over the years.
In order to reduce the amount of stress associated with moving and downsizing your home, it’s helpful to be as organized as possible. Consider getting started by taking the following steps:
Get a notebook and make a list of everything related to your move.
Include lists of things to do, your timeline, people to call and other things as they come to mind.
Begin decluttering as soon and early as possible, even if you’re still unsure where the next home will be.
Experienced home cleaners advise that if you haven’t used an item in over a year, then it’s time to get rid of it. They also say you shouldn’t keep anything if it’s not something you use routinely or something that brings you joy. By starting early, it will be less emotional than having to get rid of prized possessions and things that have been accumulated for years all at once.
Remove anything that your family is storing in your home.
If family members or friends are using the home as a place to store things, it’s time to remove those items.
Once you have selected a new home, draw a floor plan or diagram of the space.
Plan where your current furniture will go in the new house to give you an idea of how much you can actually take with you and what must you must give away or sell.
Based on your situation, decide whether or not to hire a mover.
If so, contact a few, request pricing, and decide which one you’re most comfortable with.
Gather all important papers and put them together in a designated spot.
Like a file cabinet, desk, or even a safety deposit box. Be sure to let family or friends know where they are.
Apply for address changes.
When you’re ready to move, make sure to apply for address changes with the post office, family and friends, Medicare and Social Security, bank accounts, etc.
Get a Clear Idea of What You Want and Need
It’s a good idea to think about what you’re trying to achieve before you start downsizing your home for retirement. If you’re not sure what type of housing you’re looking for, consider these fundamental questions.
How much do you feel comfortable spending on your new home?
Both the costs required initially and on an ongoing basis of the various options available vary significantly so figuring out what you can and want to spend is a big part of the equation.
What is the timeline?
When do you want or need to actually make this move?
Where do you want to live?
Many of us want to stay close to our existing homes, live near family or friends, doctors, and familiar destinations like grocery stores, parks, etc.
How much space do you need?
What are the minimum space and storage requirements for the belongings you want to take with you?
How many rooms do you need?
When considering the actual living space such as the floor plan and number of rooms, what are your minimum requirements?
What is the level of care you need?
Do you want to live independently or do you need help with daily activities and perhaps even skilled nursing care?
What about meals, food storage, and preparation?
Do you want your own kitchen or to have that taken care of by someone else?
What amenities do you want and require?
Some of the most common of these include:
- Social activities
- Meal preparation
- Housekeeping and laundry services
- Salons and beauty shops
Will pets be involved in the move?
This is an important consideration, especially if you are moving into a facility that might not allow animals.
What Type of Housing is Right for You And How Do You Find the Right Place?
There are six general types of housing options that are typically available to older adults as they’re downsizing after retirement or moving into retirement living.
Moving in with family or friends
Often, seniors find the best solution is to move in with a family member or a friend. Over the last few years, there has been an increase in this arrangement, especially with parents moving in with their adult children.
However, while many of us assume that parents would prefer this option, less than a third of those participating in a Gallup research survey said they would be willing to do so.
In addition to the senior’s desire to be independent, other factors such as physical, economic and emotional issues result in this not suiting everyone. If it does work for you and your family, it can be easier and less expensive than the other downsizing home options listed below.
Apartments, condominiums, and villas
This type of housing is an excellent choice for adults who want to live independently but without the hassles associated with being a homeowner.
There are numerous advantages, many involving freedom: freedom from home and yard maintenance, freedom to travel without property worries, and freedom to use equity and funds from the sale of a previous home for pleasure or investments.
Many of these facilities are geared toward those 55 and older and offer benefits like social activities, exterior maintenance, security and an on-site attendant.
The costs involved in multi-family living units such as these are, in most cases, far less than those associated with facilities that offer additional care.
In fact, there are a number of apartments throughout our area that offer government subsidized housing. Many have long waiting lists, so it’s essential to get on these lists as far in advance as possible. Most base the amount of rent on the senior’s income and assets.
The Mid-East Area Agency on Aging (MEAAA) is a not-for-profit agency that provides services and information to people age 60 and older and their caregivers. Contact your local MEAAA for a list of subsidized and non-subsidized apartments that cater to seniors. Go to their website, or you can reach them by calling:
- St. Louis and St. Louis County: 636-207-0847
- Charles County: 636-579-0555
- Jefferson County: 636-253-0558
- Franklin County: 636-629-3143
Retirement community or continuing care retirement community (CCRC)
CCRC’s are self-contained living units that are designed to offer independent living and privacy. You can come and go as you please and life continues as it was in your own home.
However, there is the advantage of being part of a senior community where the neighbors are all in the same general age range. Many people enjoy this since they feel the need to be in a more quiet, peaceful and safe atmosphere where they can enjoy their days with others who feel the same.
CCRC’s are very desirable because many offer Lifecare also known as a continuum of care. In other words, the senior can transition between different levels of care provided by the same community as their needs change. Evolving care based on need offers peace of mind in knowing that when the time comes, and assistance is needed, it will be readily available.
These communities are also attractive because they traditionally offer full-service dining services, social activities, transportation, and healthcare as it is needed.
Many of today’s seniors want and need a wide variety of amenities, and the retirement communities are quickly responding. The list of amenities can be extensive including a full-service gym, full-service salons, clubhouses, full restaurant service as well as a la carte selections, housekeeping services, etc.
The financial requirements of a retirement community vary widely at an estimated range of between $1500 and $10,000 per month. Some require an initial down payment which can be sizable but is then refunded to the family at some point in the future. Others are positioned much like a typical rental and charge a monthly fee.
Residential care & assisted living facilities (RLF/ALF)
These types of facilities generally provide separate living units, so you still have privacy and a great deal of independence. However, they also offer help with daily activities such as meal preparation, assistance with bathing and dressing, medication reminders, and transportation. Additionally, most provide housekeeping, laundry service, three meals a day in a common dining area, and social activities.
RCF/ALF’s are usually condos or apartments and can be single rooms or full apartments. The median price for a private one-bedroom apartment is estimated to be approximately $2500 per month.
Skilled nursing homes
Nursing homes provide 24-hour patient care for people who don’t need a hospital but can’t care for themselves. Most are set up like a hospital and provide medical, pharmaceutical, nursing, dietary, and rehabilitative services. Some residents are there for the short term while they receive rehabilitative care while others are there for long-term care.
In the St. Louis area, the average cost of a private room is $200 per day while the rate for a shared room averages $170. Medicare does not typically pay for nursing home care. Initially, the resident pays the cost of the nursing home and then hopefully Medicaid steps in.
However, the facility must be approved for Medicaid and have a Medicaid bed available. Therefore, if you anticipate a long-term stay, it’s important to verify that it is a Medicaid-licensed facility in advance. For more information about these rules in the state of Missouri, visit the Missouri Department of Health & Senior Services.
Buy a smaller home
Sometimes, as we age, the only change that we want to make is downsizing into a smaller home. A smaller house is a great option if you are still able to live entirely independently.
The primary advantages to this choice are less space to maintain, fewer or no stairs (if you choose a home with no basement), and most likely, a less expensive monthly payment based on the value of the house and the amount of the mortgage, insurance, and taxes.
The primary disadvantage is that interior and exterior maintenance will still be required and, ultimately, unless you can afford ongoing in-home health care, this is only a temporary solution since, at some point, all of us need additional assistance.
If you are interested in buying a smaller home, it’s often best to consult a realtor that you know and have used in the past or call us at 314-878-7000.
What Resources Are Available to Help Me Find the Right Place?
If you’re looking for retirement living facilities, an excellent source is the Senior’s Resource Guide published by the St. Louis Times. Find the nearest senior center at Mid-East Area Agency on Aging or go to the St. Louis Times to pick up your free copy.
In that guide, you will find hundreds of senior communities with their contact information as well as a brief description. You’ll find additional information concerning other valuable resources that you and your family may not be aware are available.
If you have access to the internet, a few of the online directories of available options that are most thorough are:
These websites include pictures, review, prices, and other details that can be very helpful.
Keep in mind that searching for other types of senior living options such as assisted living can be challenging. The St. Louis area has an unusually high number of older residents. According to the 2014 census figures, our population of residents 65 years and older is eighth highest in the United States.
It’s projected that by 2045, a full one-fourth of our residents will be in their golden years. Because of this astounding growth, many facilities (especially subsidized facilities) are not accepting new residents, or they have waiting lists.
If you find a facility that you’re interested in, don’t hesitate to add your name to the list. Because many seniors put their names on multiple waiting lists, often they are shorter than they seem.
Tours are vitally important when considering your options. Once you narrow down your choices, it’s helpful to go multiple times at different hours of the day so that you can get a real feel for the place and observe a variety of residents and staff.
Because senior living communities vary so significantly, it’s helpful to have a checklist to guide you through your selection. Below are links to checklists from the Senior’s Resource Guide to use when evaluating Retirement and Assisted Living communities as well as Nursing Homes.
Selling Your Current Home: Should I Sell “As Is” or On the Market?
Once you’ve started the downsizing your home process and identified the next home, it’s time to decide what to do with the house where you currently live. The two most common choices are to selling the house “as is” or fix it up and sell it on the retail market.
What are the advantages to selling the house “as is?”
Homeowners often choose to sell “as is” because older homes often have not been updated or maintained through the years. Spending money on renovations and repairs is costly and time-consuming, to say nothing of the costs to maintain the property during the updating process.
If you consider selling your home as is, it’s vital that you choose an investor that is reputable, has experience with the local housing market, is reliable and has the funds available to follow through with the sale.
First and foremost, make sure that they’re a member of the St. Louis Better Business Bureau and check the company’s rating and read their reviews.
Is it worth it to fix up the house and sell it on the retail market?
Older homes usually need a lot of work before listing them on the retail market. This strategy involves trying to maximize your profit by getting the house ready for a buyer who wants to live there.
These days, buyers are busy people and therefore want to buy a home move in ready-most do not want to fix the house themselves or hire someone else to do it.
They also don’t want to buy a house and have to make improvements later because of today’s historically low interest rates. Their goal is to wrap the cost of the renovation in with the initial loan to purchase the house, so they are guaranteed a low interest rate and resulting payment over the next fifteen to thirty years.
Rehabbing a house can be challenging in many ways, so if you’re considering this option, here are some tips to consider.
First, make sure all of the possessions have been removed. If there are items that family and friends don’t want but have value, there are several options. You can have a garage sale or an estate sale yourself or, for a fee, hire a professional company to do this for you. You might also want to consider donating to a charity which is a good option since this may result in a deduction on your taxes.
Another possibility is listing items on a website such as Craigslist.com, eBay.com, or selling through a consignment shop. If the items have no value and just need to be disposed of, there are professional companies that do this or you can empty out yourself. If there’s a lot that needs to go, sometimes renting a dumpster comes in handy.
Once the house is empty, do some general cleaning whether you do it yourself or hire professional cleaners so that everyone involved can get a good idea of everything that needs to be done.
Before you get started, consider hiring a certified home inspector to identify and evaluate significant problems such as structural issues, systems (such as plumbing, electric, heating and air conditioning, etc.) repair and replacement, basement leaks, the condition of the roof, etc.
Termite and lateral sewer inspections are also a good idea since these are almost always required to sell a house and doing them upfront can identify problems that are less expensive to address before the rehab begins.
Many municipalities also require inspections before a house can be sold so having a municipal inspection up front will avoid surprises later. It will also let you know which renovations you’re considering will require licensed contractors and permits.
Do your research
Consult a realtor or look up pictures online to determine what other sellers in the area are doing to attract buyers. If you want top dollar, you’ll need to make your house looks at least as nice if not better. When checking out your competition, look carefully at what upgrades have been made and how long ago.
Since most homes in our area have basements, it’s also worth noting if the other homes in your area have basements and if they’re finished. While researching needed improvements, also pay attention and ask questions to determine how much your house will sell for once it’s complete.
Make a project list
Based on the results of the inspections and your research, make a detailed list of the repairs and renovations you intend to make to the property and put them in order of importance.
The cost of labor and materials will likely be your most significant expense. Be thorough in your estimations because changes made later are expensive. Keep kitchens, bathrooms, flooring, roof, and systems like electric, plumbing, heating and air conditioning high on your list because these are critically important to buyers. Also, don’t forget the exterior improvements and landscaping – curb appeal is hugely important!
Determine the estimated costs and time frames that will be required
Now it’s time to figure out how much this is going to cost and how long it will take. You’ll need to meet with contractors and collect bids. To find contractors, many people use Angie’s List, search online, or ask friends and coworkers.
Some of the questions you should be sure to ask are:
- Do you have a list of referrals?
- How long have you been in business?
- How do you handle permits and inspections required by the municipality?
- Do you have a certificate of insurance and contracting license? (and ask for a copy)
- What is the payment schedule?
- What is the timeline for completion and what if you don’t adhere to that timeline?
- Is there a warranty for your service or the materials you’ll be providing?
- What if I decide to make changes during the process?
Make sure you check out reviews and referrals. Then, get a written bid that includes specific timeframes for completion and the ramifications if they aren’t met as promised.
Is it worth it?
You’ve done your research and have a pretty good idea of how much the house will sell for once complete. Now it’s time to do the math and see if this is the route you want to take. Remember to factor in the following:
- Costs for cleaning, permits, and inspections
- Costs for labor and materials
- Holding costs such as interest on existing loans, insurance, property taxes, utilities, maintenance, etc.
- Commissions to sell
- Closing costs
- Time and effort required to coordinate and manage the process
- The delay in receiving your proceeds versus selling “as is” quickly
If after these considerations, this makes sense in your situation, then selling your home on the market may be the right option for you.
We hope the information in this guide is helpful and will help make the next step in your life easier. Making the decisions and the actual move may appear to be daunting tasks, but there are many wonderful options available which offer convenience, security, and fun!