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 If you've downsized from a large house to a smaller one, from a house to a condo, or changed from being an owner to being an editor, please share your experience here. I know people who have done it, and none regret it, but most people are very reluctant to change their shelter.

 Here's the recent column where I suggest to a family that it may be time to rethink their shelter. http://assetbuilder.com/blogs/scott_burns/archive/2008/04/16/stay-the-course-but-rethink-shelter.aspx

Scott

I retired four years ago and a few months later we began downsizing. Like most folks, we had accumulated a lot of stuff over the years, much of which we rarely used. The first thing we did was to offer most of it to each of our four adult kids. We included all those items that we knew they would want after we passed on, reasoning that there was no good reason for us to keep storing those things ourselves until we died. Unused jewelry, photographs, family heirlooms, etc., all found new homes with our kids, as did much of our furniture.  The word we used to describe how all this felt was "liberating!" We still feel that way.

About a year ago we sold our home and moved to an adult (age 55+) apartment complex that has many stores and services within a five minute drive. We considered buying a condo but decided that after a lifetime of home ownership, it was time to let someone else worry about things like maintenance and repair.  The proceeds from the sale of our home will cover our rent and utilities for several years, after which we'll go back to drawing from our IRAs.

We have less than half as much floor space here but it is more than adequate for our lifestyle.  We've gotten used to the idea that any time we buy something, we have to think about what we're going to get rid of. You can't accumulate a lot of stuff if there's nowhere to store it.

We love retirement, especially since moving to the apartment. It is such a relief not to worry about all of the usual homeowner issues that we've handled for most of our lives.

There's one other thing that we're quite pleased about: Because our possessions are fewer and there is no longer real estate to deal with, the settling of our estate when we pass on will be a relatively simple matter for those left behind. We don't intend to check out anytime soon, but there's comfort in knowing that we've done all we can to simplify the aftermath when it happens.

We downsized by 50% two years ago.  We sold excess stuff not needed and used proceeds towards purchase of a few new furniture items we desired.  Have not missed the space and very comfortable in smaller digs.  Went into a patio home that also included lawn care.  Very happy with the home but we'll close next week on another home in a much stronger HOA.  Current HOA is very weak and problems are continuing to weaken the area.  A 25' utility work trailer is parked across the street each day.  Lesson learned is when downsizing be very careful of the economics of the neighborhood and strength of HOA to maintain the area.

New house (built 2004) will be a small upsize of 10% and with regular size lot to allow some elbow room.  Downside I will be responsible for lawn care but will hire it out.  Utilities, taxes and insurance costs were reduced considerably from orginal home and savings will transfer to new house. Again we are going to rid ourselves of more STUFF.  If it hasn't been used during past two years it's gone.  We miss the lake front but not the additional expenses and have no regrets.  Money from orginal home allowed us to pay cash and put another 100K into retirement savings.

 We are planning to retire in 2-4 years with no revolving debt.  Both vehicles are or will be paid for and we have no other debts.  Used ESPlanner to calculate consumption smoothing along with Scott's current book and one by Zvie, to help lower risk but still maintain growth above inflation.  I must warn you that ESPlanner may advise you to spend more now and save less.  My bride saw that and really got excited.  Was able to convince her that we should still stay on track with current spending and savings since it still provides everything we need and most wants.

Botton line on downsizing, the rooms are smaller but we still have all the rooms.  We just don't have to pay for all the excess square footage we were not using.  What size is it?  It's 1504 sq. ft. and we really could go down more and be comfortable.  In 5-15 years I don't know who is going to purchase the McMansions we boomers built with the continuing tax and utility increases on top of higher inflation.  If it does become a problem as I suspect, that will just add icing to the cake for having downsized early.  If I'm going to a party I prefer arriving early rather than late.  It just seems to work out for us better.

I work for an oil company and the world has reached peak production.  Yes, their will be some large finds in the future but not enough to offset declining world production as consumption increases in places like China, Vietnam, India, etc. Countries with new found wealth who are trading bicycles for motor scooters or scooter to cars.  Prices will come down 20-40-50% if geopolitical events go to near zero or worse case if our economy sprials downward bringing the world economy with it.  If I was placing bets; geopolitical events will never disappear for long periods but will become more common.  Remember most oil is held by dictatorships.  I may be completely wrong and happily accept that if so.

In 2000, we returned to Texas from a job transfer that took us out of state.  We bought a beautiful new luxury home on the golf course in the suburbs.  We had a fixed rate mortgage at a good rate, but the tax rate for the school district was one of the highest in the state.  Three years later, my company began restructuring and sending jobs “offshore” and we began re-thinking our 2 income required house payment.  Although we felt I could replace my job quickly, we didn’t want to dive into our retirement saving in case I couldn’t.  We decided to “down-size” to a smaller and older home on the other side of town in a less attractive school district. Since we don’t have children, we were able to able to take advantage of the low prices in the neighborhood.  Since we were willing to move into an older home that needed paint and flooring, we were able to reduce our total house payment (PITI) by 65%. 

 We took a little loss when we did, but are so glad that we made the move.  It took 9 months to sell that home 4 years ago. I don’t even want to think how long it would take today, if we could sell it at all. We are now paying our 30 year fixed mortgage off on a 15 year term so that we will have no payment by the time we reach 56.  Although we hope to both still be employed by then, if something happens to one of our jobs, we won’t have to dip into our retirement.  Yes, we have an older home, but we have a classic floor plan with an extra large lot.  We lost about 30% of our square footage and went from a 3 car garage to 2, but haven’t really suffered from the smaller space.  We’ve organized our storage space for maximum usage. Yes, my oven is over 35 years old and is harvest gold, but it still works. When it breaks, we will get a nice stainless steel one. Not exactly the dream kitchen that I once had, but that’s really the only tradeoff.

We didn’t just downsize. We moved to a different state of mind where financial security is more important than “things” and being described as frugal is a badge of honor.

I hope everyone thinking about retirement will take the time to read these stories. They're just what I was hoping for--- real people giving real (and intelligent) details on what they did, how they did it, and what the benefits have been.

Financial planning isn't just about saving and investments. It's about the choices we make. And each of those choices often means a reduced need for saving and investing.

Just as majorberry found, ESPlanner software often suggests HIGHER spending, not lower spending. For some, it will be essential. But for others, spending less is just improving the margin of safety. If you're curious about this software, visit www.esplanner.com.

Stay tuned. More of these stories are coming.

Scott

Without more detail, I cannot concisely respond to the earlier comment regarding "scams that are all too common on eBay”.

My many hundreds of experiences on eBay have generally been quite positive.  As a rule, you have much more exposure to scams as a buyer than as a seller.  Your biggest exposure as a seller is not being paid, or receiving poor feedback that inhibits your ability to sell effectively. 

If you are nervous about getting started with selling on eBay, you can look up a number of "Trading Assistants" in your immediate area under eBay search. They will help you list and sell your items, usually for a percentage of the final sales price.