Oscar Castillo
"Residential" Real Estate

Reasons to "DOWNSIZE" - Before or after Retirement

Posted By Oscar Castillo @ May 29th 2017 8:15am In: All San Diego CA Real Estate

Reasons to Downsize before or after Retirement

If you are retired and/or near retirement, a common thought that goes through one’s mind is “how can I cut down on my expenses, spend less time on maintaining the house so that you and your significant other can do the traveling that you have always dreamed about".  Did you know that the most common “retirement dream” is being able to travel?

When you really think about it, you are probably are no longer “tied down” to your home location anymore. By that I mean that you are no longer commuting to work so it is not like you have to live near your place of employment any longer and living in a particular School District is not as important anymore because more-than-likely the kids are all grownup - gone and living on their own by now.

So when trying to figure out how to cut down on expenses, something that is highly worth considering is “Downsizing” to a smaller house possibly to another part of town, a 55+ of age community, another County within California ...or is another state in your future?  Let's face it, you are now in a situation where you are considered to be an “empty nester”. The kids have “flown the coop” and most likely you probably do not need all the square footage and extra bedrooms of the house anymore.

Below are some reasons as to why downsizing has several benefits plus it could most likely improve your “Retirement Finances”.


A smaller home usually means less maintenance. There is less space to clean, less lawn to mow, less bushes/trees to trim and hopefully fewer things to fix ... which in reality will allow you to have more free time for you to check-off more items that are in your “Bucket List”.

Any needed painting, carpet replacing and/or window replacing will cost less because of the smaller square footage you will be dealing with.

Financially speaking:

♦  Downsizing is considered a means to reducing/cutting home expenses. Therefore within the scope and the content of this page - any type of reduction in home expenses is considered to be equivalent to “creating and/or increasing” retirement income.

  Even if you "pay off" your mortgage on current home you will still be paying annual property taxes, monthly homeowners insurance, utilities etc. and possibly some property maintenance… so theoretically speaking, all aforementioned items will be more expensive on a larger home than a smaller and less expensive downsized home.

♦  And if you plan to travel you will be away from the house a lot of the time, correct?  If so, then you will have even less need and/or reason to keep that larger home. It gets back to why are you paying for space that you unlikely need and/or are not fully utilizing anymore?  More specifically, the excess size and cost of the home could “compete” directly with your travel plans. How you may ask?...The more money that will be needed to maintain the larger home, the less you will have available for traveling.

  Don’t forget the monthly savings on utilities also. A smaller home will take less energy to heat and cool. You can also conduct an energy audit to see how you can improve your home efficiency. As you know:  it is much easier to make a smaller home more energy efficient than a larger one.

  Here is a “tidbit” on keeping your property taxes the same that you are currently paying. How you may ask?... If you are retiring and/or retired you probably are about 55+ years or older and it is important to know that at 55-years old you may qualify for a “one-time only” benefit to keep the same tax base of your current home when buying another home.  In this scenario for the purpose of downsizing. California Proposition 60/90 gives the homeowner this benefit if the replacement property is of equal-to-or-lesser value than the market value of your current home. There is only 11-counties in the State of California that allow this “same tax base transfer” and rest assured that San Diego County is one of them.

I Oscar Castillo can answer questions in regards to tax base transfers but let it be known that I am not a Certified Tax preparer nor am I an Attorney, so as always I highly recommend that you also talk to your Tax Accountant and/or a Real Estate Attorney in regards to qualifying for a “tax base transfer” and how it will be handled to fit your needs. 

If you are planning on moving to a 55+ (of age) senior living community within the County of San Diego, there is a very informative page on my website (under the "RESOURCES"  tab) that lists all of these 55+ communities and homes available for sale with the exception of any 55+ mobile home parks.

Contact me anytime, it would be my pleasure to answer any questions you may have.                                                                                                                                                                

Oscar Castillo :  BROKER - REALTOR®   (San Diego, CA)

(858) 775-1057






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