For Seniors: How to Decide When to Move From Your Home?

One of the toughest decisions older Americans can make is whether or not to leave their longtime home. While many experts recommend downsizing for financial and health reasons, the decision isn't so clear-cut for most seniors. A recent survey of more than 4,000 Baby Boomers by The Demand Institute found two-thirds planned to age in place. Need help weighing potential pros and cons of downsizing? Here are nine common reasons to consider moving out, and nine more in favor of staying put.

Struggling with stairs is a tell-tale sign that mobility is becoming an issue, according to Chris Seman, president of senior relocation company Caring Transitions. Other reasons to consider a smaller, more manageable home include falls (or near misses) or struggling to get up from a chair. Those who aren't ready for assisted living can still benefit from a smaller apartment or townhome on one level that's close to day-to-day conveniences, doctors, or any other important services, Seman says.

Remodeling sounds intimidating, but a few simple fixes can make a home livable long into your golden years. While remodeling might not suffice for those with serious mobility issues, senior-friendly fixes can include installing a grab bar in the shower, putting in a walk-in tub, or retrofitting cabinets so that they aren't so much of a reach, according to Rick Hirschhaut of Chicago-based Remodel Direct. These changes can also be more cost-effective than getting a new place, says Mark Stinson, principal and senior advisor with FAI Wealth Management in Columbia, Maryland.

Many seniors look at downsizing as a purely financial decision. According to Robert R. Johnson, president and CEO of The American College of Financial Services, the benefits can be numerous. They include a smaller mortgage payment; smaller insurance, tax and utility bills; less money spent on routine home upkeep such as mowing or snow removal; and less money spent on long-term upkeep like roofs or plumbing improvements.

Done writing that painful mortgage check each month? That alone can make the financial benefits of downsizing less compelling. "Financially, staying in a home that you own outright is very attractive financially. Your housing costs are low," notes Joan Kagan, a sales manager with real estate startup Triplemint. It also might be easier to stay put and find additional sources of income, such as renting a room.

Disciplined enough to invest the savings from downsizing? The good news is that such thrift can help take retirement savings from meager to mighty. "Downsizing provides people with more capital to invest in marketable securities for retirement," Robert R. Johnson of The American College of Financial Services says. The stock market has historically provided much greater returns than buying a home, he adds, and "stocks don't need a new furnace, a lawn mowed, or require annual property tax payments."

Think you can save a mint by downsizing? Consider whether you'll have the discipline to save the cash. "The new home may cost more than (seniors) think due to upgrades and bells and whistles," Mark Stinson of FAI Wealth Management warns. "Much like the base price for a car is not indicative of the purchase price, the average price of a home is not indicative of the home you want. In addition, downsizing to a condo or (senior) community typically adds condo fees, homeowners' association fees, and recreation fees."

Having family nearby can be a boon for everyone, says Jennifer Beeston, branch manager and vice president of mortgage lending with Guaranteed Rate Mortgage in Santa Rosa, California. It's great for seniors who want family around to help care for them, and those who remain active can help out with grandkids. "I have many people coming to me looking for two unit homes or a home with a 'granny unit' so that the parents can live with their children but in their own space," Beeston says.

Even for seniors who need some day-to-day assistance, staying put can still make financial sense. "Often, it's less expensive initially to age in your home," says Kay Bransford, president of MemoryBanc, which makes organizational products for seniors. Julie Northcutt of Caregiverlist, a senior care referral service, provides this helpful starting point: Home care averages about $20 an hour, while nursing-home care can be anywhere from $150 to $300 a day, she says.

For some, downsizing is less about finances and more about finding new friends who are at a similar point in their lives. Choosing a smaller place can mean moving to an area popular with retirees or finding a senior-care community that provides classes, special events, entertainment, and more. "The sense of community can be very strong in developments like this and that can be a huge draw," Jennifer Beeston of Guaranteed Rate says.

One creative solution for seniors who don't want to leave their home is aging in place with others. Just as young professionals seek a roommate to keep costs down, so can seniors. Wendi Burkhardt, CEO of senior roommate-finding service Silvernest, says other benefits of house sharing include increased safety and companionship. The latter is huge for seniors, she says, noting that there's a statistic that says "social isolation has the same health impact as smoking 15 cigarettes a day. That alone should be motivation for all of us to find a housemate as we age."

While it may be tempting to hold onto extra rooms for visitors, think twice. Florida real-estate agent Jennifer Sommers says a common objection to getting a much smaller place is that seniors want ample room for their children and grandchildren when they come to stay, but she says occasionally getting a rental house or hotel room can make more financial sense than staying indefinitely in a house that's too big.

A lot of seniors fantasize about downsizing somewhere warm, like Florida, or in a big city where there are plenty of activities. But the popularity of these areas can also mean a boost in expenses, whether that means higher-than-expected rent, a bigger tab at the grocery, or a $15 ticket to that 8 p.m. movie. Many areas in the Midwest and South have low home prices, taxes, and insurance rates, making downsizing less compelling for seniors who live there.

Constant home maintenance can become exhausting for seniors who want to save their time and energy for other pursuits. "Free time is one of the most valuable commodities for many individuals, especially those in retirement," Robert R. Johnson of The American College of Financial Services says. Moving into an apartment worked for Timothy Weidman, a retired professor of management and human resources at Doane University in Nebraska. "I rarely miss the time-consuming (and often costly) chores associated with maintaining a large home."

Moving is pricey, no matter how small the place you're moving to. Hiring movers can cost thousands. To list your home with an agent means paying a hefty commission, usually somewhere around 6 percent of the sale price. Closing costs can be another cost, plus there are all the little costs of making a new house a home. For instance, you may need to replace furniture that's too large, and you may wind up paying to store belongings that you just can't part with but that won't fit in your new house.

Does it feel like the walls are closing in because of all the clutter? Downsizing is a natural time to purge years of accumulated belongings, experts note. "The challenge is that their homes are filled with multi-generational belongings after 30 years," says Ben Soreff of Connecticut-based House to Home Organizing.

Bought your home decades ago and it's increased in value tenfold? Congratulations, but be prepared for a painful capital gains tax hit on the proceeds when you sell. The tab could be 15 to 20 percent of any profit over $250,000 for an individual taxpayer, or over $500,000 for those married filing jointly. That could take a big bite of downsizing-related savings.

Don't like the idea of downsizing? Don't wait too long if you want a say in the matter, says Tina Olton, a retired financial manager and elder counselor in Cambridge, Massachusetts. "If seniors make the decision to downsize now, then they skip the risk of having to be forced to downsize later."

For some, the fact that they love their home is reason enough to stay put. "When you live in your home for a while, you gain a sense of community. Your identity becomes linked with your surroundings," retired financial manager Tina Olton says. "If the person is mentally and physically cognizant and has developed a sense of community in the area, then I advise them to stay. Losing that socialization and happiness can negatively impact that person's health, and it's not worth it."