Financial Planning
June 7, 2023

5 Downsizing Tips for Empty Nesters That Will Improve Your Finances

Stewart Willis

Are you excited about your future in retirement as an empty nester? You might be looking for downsizing tips for empty nesters if the kids are going to college soon or starting their own lives.

Before making a rash decision, you should consider what downsizing means. For empty nesters, downsizing is really about moving into a small home or space. However, downsizing can also mean eliminating expenses and aspects of your lifestyle that only made sense before you were an empty nester. This isn’t for everyone, and you might be wondering if empty nesters should downsize.

You should always seek solid financial advice and retirement planning advice from a professional. This is what will give you real insight into your unique situation and need. Here are some downsizing tips for empty nesters wanting to make the most of their retirement.

1. Examine Your Goals

There is a lot of talk about downsizing options for empty nesters, but do you need to downsize? Do you want to downsize? What do you really want retirement to look like for you? Downsizing is a big decision, and assessing your needs is important before taking the plunge.

This is one of the biggest downsizing tips for empty nesters: think about what you want out of retirement. Evaluating factors such as location, accessibility, safety, and proximity to amenities can help you make a better decision that fits your lifestyle and budget.

Downsizing to a smaller home is usually a go-to option when retirees want to avoid home maintenance costs and expenses. If this is likely a concern for you, then maybe that is a route you should take. However, if you like your home or don’t want to move, you don’t have to downsize if you enjoy an ample space or don’t need to financially.

Are family reunions and large gatherings something you want to host in your retirement? Then, maybe downsizing isn’t the best way to go. Gardening and yard work can keep you physically and mentally active in your later years. If you enjoy it, then downsizing might not be appealing.

2. Prepare Long Before You Become an Empty Nester

The earlier you start to plan your retirement, the better. Of course, you can’t anticipate everything retirement throws at you, but you can create a financial support system. If you are now purchasing a dream home, think about what your needs may be in retirement.

Senior couple enjoying time together on a sofa.

Having a first-floor master bedroom makes a living in the home you loved much easier over the years. A private suite on the first floor can be ideal and convenient for older people. This way, you can reserve your second story for guests during their stay.

This empty nester downsizing tip is all about proper preparation. Planning is key when buying your dream home for now and in the future. With careful planning and consideration of current and future needs, you can prepare for a comfortable and enjoyable stay in your home.

Downsizing can sometimes be a mistake if you anticipate your adult children returning to stay for extended periods of time for holidays. If you are family-oriented or want to host guests, you can still do so comfortably. Having a larger space provides more room for visitors and the opportunity to create a warm and welcoming place for family members to return to.

3. Consider a Reverse Mortgage

A common downsizing tip for empty nesters is to sell and move to a smaller home to save money. This is especially true if you have mortgage debt. However, taking on a reverse mortgage is an option to consider. Ideally, you should hire a professional to see if this is feasible in your situation.

A reverse mortgage is a unique loan option that allows eligible homeowners to leverage the equity in their home without the burden of monthly payments. You have to be 62 or older and have 50% equity in your home to take advantage of this. It is unlike a traditional home purchase loan, which requires regular payments.

Instead, funds are dispersed as a lump sum, monthly payout, or a line of credit. This type of loan can offer an important financial solution for seniors who wish to remain in their homes while still having access to additional funds.

4. Consider Other Ways to Downsize Meaningfully

When you are an empty nester, your lifestyle changes from being a parent to being more independent. This means that some expenses you have as a parent don’t need to be maintained. You might find that you can downsize on some things that you don’t need.

Downsizing doesn’t always have to mean living in less square footage. If you’re looking for ways to save money, downsizing your vehicle might be one way. A smaller, more fuel-efficient car will save you money on insurance and other related costs. It can also help reduce your environmental footprint.

5. Consult a Financial Advisor

This downsizing tip for empty nesters is about being aware of your financial situation. Without awareness, downsizing empty nesters are in for a shock when they realize that downsizing their home doesn’t always provide the financial freedom or lifestyle change they thought they needed. The real estate and housing market is tumultuous right now. You shouldn't feel forced to move if you don’t want to.

If a smaller house is something you truly want, then you can work towards that with a financial plan. If it isn’t, then a financial advisor can help you with a financial plan that works for you to create a retirement plan that can accommodate the life you want to enjoy in retirement. Retirement should look like a smaller version of the life you had—it should be a time when you have the freedom to pursue things you want to.

Our financial advisors use a cash flow program to determine if our clients are going to be able to sustain themselves in different markets. By having this plan, you can make sure your money will last accommodate your future plans.

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Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to and search by our firm name or by our CRD # 175083.

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