As you near retirement, there's a lot to think about. But perhaps the most pressing question is: Where do you want to live in retirement?
Maybe you want to move to a new home or simply tidy up the home you have. If you’re hoping to stay in your current home as you age, you are not alone. A 2024 national survey by AARP revealed that the vast majority of Americans – 75% of adults aged 50 and older – wish to remain in the current home as they age.1
However, there's still a portion of the retirement population who want to downsize and relocate to a new home. If you are thinking about downsizing, here are some considerations so you can make the process as enjoyable as possible.
Making the decision to sell your home
Be confident moving forward with your decision to sell your home. Here are things to consider:
- Do you feel stressed when thinking about your home's maintenance?
- Are you always on the go, barely spending time in your home?
- Are you spending more than 30% of your income on your house?
- Do you have rooms in your home that you barely use?
If you answered yes to most (or all) of these questions, it may be time to downsize.
Tax implications of selling your home
If you owned and lived in the home for a total of two to five years before selling, then up to $250,000 of profit is tax free, or up to $500,000 if you are married and filing a joint return. If your profit exceeds the $250,000 or $500,000 limit, the excess is typically reported as a capital gain.2
What to do with your possessions
Wherever your path leads, you're going to have to do something with all the material possessions you've accumulated over the years. If you're truly downsizing, you're going to have to find a new home for many of your items. Start the process of purging well before the packing begins.
When sorting through items, create separate piles labeled: keep, toss, donate, and sell. Don’t let yourself have a "maybe" pile, as it will slow the decision-making process. It's inevitable that you'll go down memory lane as you sort through old family photos and your children's art projects and school reports. Give yourself enough time to enjoy these memories. And give your grown children enough time to pick up any memorable items they'd like to keep. A great alternative to keeping physical copies of old photos is to digitize them. Luckily, there are plenty of services that do just this sort of thing. Once you've given yourself adequate time to reflect on things, it's time to get to work.
What to keep
You have a good idea of what you need to keep: a full set of dishes and silverware, well-loved cookware, furniture, important paperwork. You get the picture. Other items that you'll need no matter where you live is an emergency kit, a step ladder, and a toolbox with the basics. Also, be sure to clearly label all your boxes, noting the items in each and the room you'd like the box put in when you move.
What and where to donate
There are plenty of places that want your gently used items. Just be sure the items you donate are in good condition. Here are some places to start with. Also do an online search and you'll find a plethora of places that are looking for used items.
Home improvement stores and donation centers
Do you have a dresser, coffee table, couch, miscellaneous building materials, paint supplies, and even а sprinkler that need a home? There's a good chance your local Habitat for Humanity ReStore will take them. Located throughout the country, these stores use the profits from the sales of donated items to help build, rehabilitate, and repair homes in your community — all while keeping reusable household items and building materials out of landfills. Be sure to keep a record of what you donated for your tax records.
Thrift and secondhand stores
Oftentimes, the proceeds from the clothing, jewelry, games, and housewares that you donate will assist those in your community who have needs related to employment, shelter, food, and emergency relief. Some thrift stores even partner with local nonprofits. Donate your items to an organization that aligns with your giving goals.
Local libraries or Little Free ones
Consider donating books to your local library. Librarians are always looking to stock their shelves with good books. Because government funding, grants, and monetary donations can be in short supply, be a good neighbor and unload some of yours at your local library. Or stop by neighborhood Little Free Libraries and place books there.
Food banks
You probably don't want to schlep heavy canned goods and unopened boxes of cereal, grains, and other shelf-stable foods to your new home. Instead donate them to a local food bank. Make sure to check expiration dates before you do.
Animal rescue and shelters
Have you saved lots of old sheets, towels, and blankets over the years? Instead of tossing them, check to see if local animals in need could use them. The items are perfect to use for their bedding and bath time.
What to toss
Recycle whatever you can. What can’t be recycled or thrown out in the trash, such as old TVs and cell phones, unused paint, and other potentially harmful substances need to be discarded properly. Check with your city or county for requirements.
What to sell
Online marketplaces are good options to utilize. You also might consider holding an estate or tag sale. A professional estate sale agent will typically charge commission on a sliding scale, between 30 and 40% of the total earnings. It can be worth it if you have a lot to get rid of before your big move.
Making the most of your new space
One of the reasons why you want to move is to have less space to care for, which is liberating. However, it's still a smaller space, one you'll need to get used to. Consider replacing over-sized and heavy furniture with space-saving or dual-purpose pieces that are better suited for your new space. You want your home to feel cozy, not cramped.
Get started on downsizing today. Then, once you make the big move, you'll have a new nest ready just for you.
