Don’t Downsize For the Money

Three and a half years ago, just before COVID hit and housing markets went even higher while interest rates skyrocketed, Ryan wrote a brief entitled “Your Home is Not An Investment (You Probably Won’t Downsize).” An alternative title probably could have been “You Might Downsize (But Don’t Do It For the Money).”

An article in this week’s Wall Street Journal largely reiterates what Ryan described years ago. And here’s the crux of the matter:

“Trading to a smaller home has never been just about spending less money. People move to smaller homes to make their lives easier, to be closer to family members or to eliminate maintenance tasks as they age. But with mortgage rates pushing 8%, a meager supply of smaller homes for sale and steep prices for the few that are on the market, the math doesn’t work in many retirees’ favor.”

In other words, downsizing for most retirees wasn’t (or shouldn’t have been) primarily about the math. There were other reasons not directly relating to money for which retirees wanted less house, so they downsized. It’s just that now the math is so hard that it’s trying to leap-frog those other priorities by necessity. 

Downsizing—or upsizing, or anything related to housing—is by its very nature one of the more emotionally-charged decisions you can make, and because of the size of the assets involved it has tremendous financial implications. And one of the realities these decisions bring into sharp relief is how intricately woven together different categories of priorities can be. 

There are very few purely mathematical financial questions, and there are very few purely emotional questions. Our needs and desires are complex, and it’s rare to be able to neatly compartmentalize them. 

That’s why it can be clarifying to have someone you trust to help, not just with the math, but with synthesis of math and all the rest of your priorities. Whether it’s downsizing or changing careers or paying for college or giving generously, our great privilege is to approach these decisions holistically, and it’s a privilege for which we’re incredibly grateful.


The content above is for informational and educational purposes only. The links and graphs are being provided as a convenience; they do not constitute an endorsement or an approval by Beacon Wealthcare, nor does Beacon guarantee the accuracy of the information.

Jared Korver
[email protected]

A product of small-town North Carolina (Carthage, to be exact), I’m proudly married to my best friend and co-adventurer, Amy. Together, we have two sons–Miles and Charlie–and could more or less start a library from our home. I love being outside, can’t read enough, am in the habit of writing haikus, and find food and coffee to be among life’s greatest treasures.