As you approach retirement, the challenges of maintaining a full-sized home that was once populated by your kids can begin to feel burdensome. With life expectancy climbing ever-higher, more and more Americans are retiring with almost half of their life ahead of them. That can be a long time to contend with the challenges of an out-sized home. If you are considering downsizing, I recommend starting early. It should be a gradual process – one that is informed by sound advice from your financial planner, met with the support of your family, and well-planned for getting you into the best new home for your retirement. I’ve seen some outlets call this concept “rightsizing,” I just call it smart.

While there are many practical reasons to downsize your home, whether or not it’s right for you is something that is most well-understood by your specific situation and the long-term plan laid out by your financial adviser. The advice I could offer here for downsizing your home is limited to how it should look and feel, which is that in the end, it will ideally be a holistic experience and a smooth transition; and it should add to your nest egg.

For now, let’s assume that you won’t be downsizing your home. If you’re ramping up to retirement or in the early years, there is still lifestyle downsizing you can do that will go a long way towards upsizing your bottom line.

What can you do to downsize your lifestyle?

De-Clutter

This can be a therapeutic exercise that gets you in a downsizing mindset. Paring down the sheer amount of stuff in your home can help make the space feel less overwhelming and more essential. Get rid of old CDs and movies. Ask your kids to digitize them or start streaming music and video. If movies and CDs are just laying around in boxes these days, they are only taking up space. Do a deep dive into your wardrobe. If you haven’t worn a shirt in three months, donate it. Those old golf clubs? Sell them to a secondhand shop. And sell those old appliances. Once you’re down to the necessities, organize everything in ways that are most practical for your new lifestyle. You’ll be amazed at the difference it makes.

Spending Audit

This idea circles back to my advice that we always need to be updating our financial plans. Think critically about areas where you can save. Do you still need 300 channels? If not, downgrade your cable package. Do some serious meal planning and only buy groceries that you will use each week – reducing food waste could save you a lot of money. What about energy costs? A few degrees on the thermostat and remembering to turn off lights when you leave a room are smart and easy ways to reduce spending. Little things like this can add up, and in a year’s time, maybe they’ve paid for that weekend trip you wanted to take. Once you’ve cut as much spending as possible, update your spending plan moving forward, and keep looking for non-intrusive ways to save.

Healthcare

Less than making any changes to your coverage, this advice is more about prioritizing your health. If you start making smarter health choices now, your out-of-pocket costs down the road may be significantly less. Healthcare cost is one of the main reasons that retirement plans get derailed. Some will be inevitable, but if you’ve taken care of yourself in retirement, you may be able to avoid some of the unexpected problems that you and your adviser hadn’t factored into your plan.

Upgrades not Overhauls

Avoid the temptation to re-do the kitchen or add a sunroom, unless it’s been a part of your retirement plan all along. Major renovations can seem like a good idea, especially if you think you will be downsizing your home later on and the new space will add property value. Still, you shouldn’t assume you will recoup the costs. Instead, focus on upgrading some of the major appliances around your home and making long-needed repairs. Upgrades and repairs should be less impactful to your long-term plan, and are likely easier to correct if expenditures like that were not accounted for by you and your adviser.

Pay off Your Debt

The sooner you can stop sinking money into interest, the better off you should be long-term. Going into retirement debt-free can make a huge difference, especially early-on. This should be a priority in the years leading up to retirement. If you’re carrying debt into retirement, you may want to get with your financial adviser and devise a debt plan to clear your accounts as soon as possible, then adjust your retirement and spending plan from there. Again, we should always be updating our plans if there are any significant changes. Staying on track is key.

Downsizing to upsize your bottom line can be helpful regardless of your situation, but it’s likely most impactful if you’re already well prepared for retirement. If you’re not, it’s not too late. I can get you on a path towards a successful retirement, regardless of your starting point. First, we need to know where you stand. Take my Retirement Quiz to find out.

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