Why keep increasing house size if you plan to retire in smaller one?

[GoodSteward]

This was mentioned on another thread, and it got me thinking.

we look to have smaller homes in our later years

I have often wondered why so many people work so hard to get bigger houses until they get close to retirement and then downsize. If you are buying to rent them out later or some other retirement strategy I guess that's an idea, but if you don't plan to do that, why do you want to keep buying bigger, more expensive houses with the payments, taxes, and other expenses to go with it? This reduces your cash flow that could be used for retirement savings, etc. I have three kids, and one on the way in a 1300 sq ft 3bd, 2bth house. I only owe 70k on it, and although we could use the space I have no desire to increase my debt/payments. People have raised large families in smaller homes for decades. It seems to me people often buy bigger houses to reflect their building up in life(like a status symbol) just to go down to a smaller house when they retire because they are done with that "game." I know this isn't everybody, but it was just some thoughts I had on the subject. Seems like a waste of money to me.

[DaveInPgh]

I'm with you on this one. I am still many years away from retirement and I would already love to downsize.

[bjl584]

I'd say it makes sense to work toward a larger home if you are a young couple and plan to have children.


My cousin and his wife moved into a house that was 2 bedroom 1 bath. It worked for them for the first 5 years. But then, twins came along. They didn't move, but they did put on an addition. They added a Master bedroom with bathroom, and expanded the kitchen/dining area. They also added a finished basement underneath as a den/playroom. In their case, having a larger living space made sense.

[disneysteve]

Because you need a bigger place to put your stuff.

https://www.youtube.com/watch?v=MvgN5gCuLac

[DaveInPgh]

I misread & misinterpreted the OP.

I thought it was in reference to people that are near retirement and buying bigger.

I definitely understand buying bigger for anyone planning to grow their family.

[corn18]

We moved around a lot in the military. We bought sometimes but we also found ourselves living in base housing with 2 kids which was 1,500 sq ft. We managed just fine in whatever we lived in. But, as with many things, we always bought up. We are now in a 4 BR/ 4 BA 4,200 sq ft house that served us well for the last 8 years, but we are now empty nesters. We don't use the finished basement. We have a "bonus" room that is fully decorated with a sofa, bookcase, etc... You know what happens in that room? It's where the cats go poo. No other purpose for it because our house is too big. We have 3 fully furnished guest bedrooms. And don't get me started on the formal living and dining rooms that never get used.

Did we need a 4,200 sq ft house? Nope. Could we afford it? Nope, not when we bought it. Could we have done just fine with 1,800 sq ft? You betcha.

To answer your question, we want to downsize now that we are empty nesters and approaching retirement because we kept buying bigger houses we did not need.

Tom

[Tabs]

Huh, that's something I don't quite get either. Some people just seem to really enjoy bigger and better stuff, and I suppose a house is no different, even though upkeep can scale up dramatically (depending on size and location).

One very interesting observation I've seen in my friends and others is that some view having a house and car as a sign of financial wellness. The more expensive they are, the better off you must be doing.

That, of course, is almost always incorrect. I can easily go in way over my head on a car and house purchase, and ultimately end up worse off.

Whereas, like many of you here, I find that simple, small, efficient, and ultimately low cost living is the better way to go, even if it means ending up with much humbler house and car.

Perhaps some people only see the tangible in front of them (like the house and car), and not necessarily the intangible (like the additional interest payments of going into debt). I don't know.

I've been toying with the idea of just giving up on a house completely, and perhaps live in a camper van. Maybe too crazy haha. My monthly house costs are actually relatively low at $400/mo... which includes all of my utilities and HoA fees. That is what would free up on my budget if I could pull it off....

For now, I am staying put in my gigantic 1800 square footer, if only because my kids still swing by and have a place to stay, and its location is only 10 minutes away from work.

[disneysteve]

I definitely understand buying bigger for anyone planning to grow their family.

But understand that this is a very recent concept. 30 or 40 or 50 years ago, people raised families in far smaller homes than they do today. Kids shared rooms. Families shared bathrooms. Today, that's almost unheard of except among the poorest families.

I was raised in a small row home in Philadelphia. My brother and I did each have our own room but the 4 of us shared one bathroom. And many of our neighbors in identical homes (or smaller) had 3 or 4 children.

New homes today are more than double the size of new homes 30-40 years ago even though the average family size has steadily declined. People just demand and expect more and more space.

[Jluke]

other influences for families moving up in home size:

better/different school districts?
better neighborhoods?
newer home?
lower interest rates?
bad math skills?

[FLA]

I downsized from a 2000 sq ft townhouse as the kids were getting older. We had a sunny, walk out basement with a lovely family room and a huge office, the entire floor was never used.

My mom is terminally ill so because I was a hospice nurse and want to take care of her, DD and I bought a handicapped accessible house with them. It is a 2000 sq ft ranch with two added rooms in the basement. Now that DD is out, to me the house feels too big. My parents are on one side, I'm on the other. I keep thinking about when they die, I am going to have to downsize again.

I don't like having more house than I absolutely need at all.

[DaveInPgh]

But understand that this is a very recent concept. 30 or 40 or 50 years ago, people raised families in far smaller homes than they do today. Kids shared rooms. Families shared bathrooms. Today, that's almost unheard of except among the poorest families.

I was raised in a small row home in Philadelphia. My brother and I did each have our own room but the 4 of us shared one bathroom. And many of our neighbors in identical homes (or smaller) had 3 or 4 children.

New homes today are more than double the size of new homes 30-40 years ago even though the average family size has steadily declined. People just demand and expect more and more space.

Oh, these are facts that I understand completely.

My father's family was a family of TWELVE! He was raised in an 1870 2BR Row house with 1,000 sq ft living area. The house remained in the family until 2008, and I was inside the house on many occasions. It was hard to imagine a family with 10 kids there.

My mother had the same size family and living conditions, although I was never inside her childhood home.

[LivingAlmostLarge]

I'm moving into our 3rd home and yes we've gotten bigger each time. I am also planning on downsizing once our kids leave.

First we moved bigger because it's hard to have kids in a 1 bd condo 500 sq ft. Second place was 3 bd townhouse 1500 sq ft but no garage and 3 level living was hard with kids. Now we're renting a house that is 3 bd and 1800 sq ft with attached garage and that's what we are looking to buy. Well actually 4 bd plus den if we can afford it minimum is 2100-2200 sq ft we figure. I don't know what we will end up with.

So Yes I am moving bigger, I doubt it'll be huge but it will be larger. I think my places haven't been much bigger than many on here, but the nature of prices where we live has forced us smaller than what most people buy for much, much less and bigger.

I didn't know anyone who bought a house first go around where I used to live because it was so expensive. And many bought tiny cape 3bd/1.5ba homes for a lot of money. Where we've lived $200k bought us a 1 bd condo years ago. And $500k+ for townhouse and sold for more.

Now we are also moving for better school districts (kids) and we can afford the garage and extra bathroom, etc. I'd say we lived modestly and not what you would think of when you hear the prices we've paid. So yes we'll buy bigger and downsize later.

[GoodSteward]

This grew rather quickly.

I figured there would be a plethora of responses. To add to this my dad was one of 4 kids and was raised in a 1300sq ft house with 3bd/2bth. My grandparents have passed, and now my parents are living in the same house. My brother and I shared a room in a two bedroom apartment growing up for most of my childhood and teenage years. It's something I'm used to.

I will admit I would like more room, however, I just don't want all the baggage that goes with it financially. I enjoy my simple, modest home and adding that extra office building (260 sq ft) helps a lot with getting the clutter out and giving some breathing room. When my kids are all teens I don't know...I guess we'll see.

[creditcardfree]

Well since you pulled my comment I guess I should reply!

We're military, so we aren't just moving around to get a bigger home. We are buying what is available in the school districts we want our children to attend and that we can afford.

Our first home was 1500 sq ft, we lived there 9 years. It wasn't ideal as there were only two bedrooms on the main level, so our girls shared. I know that we could have made it work long term as there was a bedroom in the basement.

Second home 1500 sq ft also, lived there six years. Next home 2200 sq ft, we did increase our space because we were looking for four bedrooms, so that our parents didn't need sleep on an air mattress in the living room when they visited. We would have accepted less space if it met all of our other requirements.

And now we rent a 2400 sq ft home. It has four bedrooms again. Only one daughter living at home and it is too much space...this is how I know we will downsize. And we could probably downsize now, but we are committed to providing stability to our daughter during her last years of high school. The decision is made, we are committed.

But maybe you were questioning my statement based on those who keep up with Jones's and move without thinking it through. That's not us. We've had to buy what was available that met our criteria, and it happens the homes did get a little larger.

[creditcardfree]

Because you need a bigger place to put your stuff.

https://www.youtube.com/watch?v=MvgN5gCuLac

I love that!

Sorry off topic...I've actually talked two people into decluttering BEFORE deciding to move. One actually stayed in their home another five years. Originally, she thought she needed to move because they were about to have their third child. I suggested two older kids share a room. She said, we don't have enough room. Well, what if you got rid of some of the stuff. I happened to know her mother in law was constantly bringing stuff to their home. She took me up on the idea and was so thankful for the encouragement. They did eventually move when child number four came along.