Is a Tiny House the Big Solution for Your Retirement Plan?

tiny home

Could a tiny home give you the time, money and freedom to spend on what is important to you?

The tiny house movement may seem like a young millennial sort of thing, but it might just be an ideal solution for your retirement. That’s what a growing number of bloggers and retirement commentators seem to be noticing.  In fact, about 40 percent of tiny houses are inhabited by older adults.

Living in a Tiny House —  How Small is Tiny?

According to the U.S. Census Bureau, the typical American home has been getting bigger and bigger.  In 1973, the nationwide average house size was 1,660 square feet.  In 2013, the average size had grown to 2,598.

Tiny houses are much much smaller than these averages.  Tiny houses are not just small suburban bungalows as compared to McMansions. Tiny means very small — much smaller than average.  In fact, some tiny homes are no larger than 100 square feet. That’s about the size of an average house’s master bathroom.

If you’re stuck thinking about how difficult it would be to live in your bathroom, step outside of that for just a moment. A tiny home doesn’t have to be that small. Many are closer to 400 or 500 square feet. However, that’s still less than a quarter the size of a typical American home.

Think you could live in that amount of space? A lot of people do, and many of them would never go back.

Retirement plan

Why Is Tiny Home Living Gaining in Popularity for Retirees?

There are a few key reasons retired people are pursuing tiny homes:

1) Financial:  Tiny homes are the ultimate in downsizing.  Home equity is the biggest source of wealth for most people.  Cashing out your regular home and moving into a tiny home can dramatically improve your retirement finances.

Retirees talk a lot about downsizing. Moving to a tiny home is downsizing BIG time… Wait… small time, but with BIG financial benefits.

2) Environmental: Tiny homes are smaller, which means that they require less resources to build and keep running.  They have a smaller physical footprint, but also a smaller environmental footprint.

3) Simplicity: Retirees are often told to pare down their possessions now.  After years of perhaps raising a family, acquiring a lot of possessions and maintaining big homes, the idea of fewer things and less stuff to deal with can be very appealing.

Retirement can be a great time to simplify and focus on the things that are truly important to you.  Tiny living can help you do that.

4)  Freedom:  Homes require care and maintenance.  The things in our homes require care and maintenance.  Making our homes smaller and having less stuff gives people more time and energy to focus on the things that are really important to them: grandchildren, friends, travel, hobbies, etc…

A tiny home does not mean slowing down though. It’s more about freeing up time and having fewer responsibilities. When you think about it like that, a diminutive home could very well equal liberation. With less square footage, you could have more time and money to do whatever you want.

Upending the Cliches of Tiny House Living

If you think tiny houses are just for young singles and couples, you’re not alone. HGTV’s show, Tiny House Big Living, is a wealth of inspiration for people who want to seriously downsize. But the majority of the people moving into tiny homes on the show are very young.

But according to Ethan of The Tiny House blog, these mini homes are just as appealing to retirees and people approaching retirement. Millennials — today’s young people — are focused on simplicity and freedom which are ideas that also have a lot of appeal to many of today’s retirees.

Retirement planStairs tucked in make loft sleeping safer and more accessible.

Big Considerations for the Tiny Retirement Home

The trick with a little house is outfitting it for optimum efficiency, safety and priority of the things that are important to you.

Efficiency: Builders know how to optimize square footage. Built-ins are one way that builders use square footage effectively. Anything from a sofa to beds can be built in to conserve space.

Safety and Age Related Features: As we get older, multi story homes can be problematic — even full size multi story homes.  However, many tiny homes utilize two stories — usually for a loft bed. If you decide on a loft model, stairs are probably a better choice than ladders. While stairs take a lot of space, creative builders know how to use every inch effectively. The space under stairs can be appropriated for something else, such as a small kitchen or all-important closet storage.

Priority of What is Important to You:  The trick with finding or designing a tiny house, is to know what is important to you.  You can not have a massive dining room, huge bed, double ovens and oversize living room furniture.  But, you might be able to figure out a way to have one of these options.

But it is not all about compromise, Ethan makes a great point about a livable tiny house needing some full-size features. One of these is the shower. Whether or not mobility is an issue, a cramped shower makes a small house feel smaller. Plus, a full-size shower is important for safety. If you some day need a shower seat, a standard one lets you have it.

Retirement planSmall can still be efficient.

It is Not Just About Your Home, Tiny Home Living is Also About Your Stuff and Your Way of Life

Downsizing into a tiny  home is more than clearing out closets and having a yard sale. If a tiny house is in your retirement plan, you need a whole new way of thinking about possessions and your lifestyle in general.

Think about all of the keepsakes that you’ve collected. Even though many of them might stay boxed up in your current attic, could you really part with them forever? And what about cooking a Thanksgiving meal. A tiny kitchen might make that difficult.

With as much as 40 percent of tiny house owners fitting into the over-50 age group, you can bet that the drawbacks for seniors aren’t an afterthought at all. Senior Planet explains that although the split is almost even, a larger percentage wouldn’t consider downsizing as much as it would take to live in 500 square feet or less.

Living in a Tiny House — Try Before You Buy

Downsizing to a mini house is not something to consider lightly. Although some are designed to resemble more traditional architectural styles, such as tiny Victorians or Cape Cods, inside the walls is a lot different.

Trying out a tiny house can reveal more about what it’s really like than any measurements and paper planning ever could.

Here are a few resources for trying out tiny living in a tiny home:

  • Tiny House Vacations — This site lets you find and rent tiny homes all over the United States.
  • Tiny Houses on AirBnB — Sharable has amassed a list of 25 particularly charming tiny homes that are available to rent via AirBnb.
  • Tiny Rentals in All 50 States — House Beautiful identified tiny rental homes in all 50 states.
  • Caravan – The Tiny House HotelCaravan is like an adorable, bohemian village sprinkled with tiny houses in every imaginable style.  Similar resorts are popping up all over the country.

Trying to live out of an RV or a boat might be another way to try out living in a tiny space.

If renting isn’t an option, there’s also a tried-and-true way to get a feel for just how small one of these homes really is. In the RV enthusiast community, the standard recommendation is to tape off the square footage on the floor in your home and then spend a few days living in those confines. It won’t be identical, of course, since you’ll still have to step out to cook and shower. But 500 square feet in reality is a lot different from what it seems like on graph paper.

Finding, Buying or Building a Tiny Home

A quick Google search shows that tiny house builders are everywhere nowadays. It’s more a matter of choosing one than finding one.

Another way to learn what a tiny house is really like by communicating with a builder and arranging a home tour. You can bet that every builder who specializes in miniature houses is already accustomed to being asked. Builders can answer more of your logistical questions, too.

tiny homes

Tiny homes can usually be customized.

Some people choose to build on their own, which gives total control but might come with other issues such as permitting and labor. If that’s a route that you want to go, websites such as Tiny House Build and scores of books on the topic are emerging all the time.

One consideration to keep in mind is permitting.  Local code regulations can be a big hurdle.  Think about it from a city revenue perspective. Property taxes are partly based on square footage, so tiny houses mean less revenue. Senior Planet suggests that’s one reason why some tiny houses are technically considered RVs and are registered with the DMV.

How Much Does a Tiny Home Cost?

Forbes says that the average tiny house costs up to $400 per square foot, which is much more than a traditional home. That puts a tiny house in the $60k to $100K range. It all depends on amenities and whether you build it yourself. Smaller fixtures such as water heaters are typically more expensive than their full-size counterparts. But on the other hand, the cost of occupying a tiny house is less than a larger home.

Is Living in a Tiny House Right for You and Your Retirement?

Tiny houses aren’t for everyone, but one might be right for you. You can save money in a tiny house even though they’re not always cheap. More importantly, you can find more freedom and a simpler way of life by giving up the sprawling ranch and moving to a small, efficient home.

Downsizing in a major way is part of many a person’s retirement plan. It takes some dedication and a whole lot of homework, but many retirees believe that it’s all worth it.

Could a tiny house work for you and your retirement? The NewRetirement Retirement Calculator can help you document your current plan and help you visualize ways to improve your finances.  For example: input your current housing situation, then try out downsizing as an option — you will immediately be able to see the impact downsizing has on your retirement finances — now and in the future.

The Key to a Happy Retirement?

A Great Retirement Plan!

The NewRetirement Retirement Calculator makes it easy to improve your retirement security.

1 Response to “Is a Tiny House the Big Solution for Your Retirement Plan?”


  1. 1 Richard Charron

    We are currently living in 504 square feet and couldn’t be any happier. We have a good sized bedroom, complete living room, adequate kitchen space and storage as well as a full size bath / shower etc. We also have room in the bath area for a full size stacking washer and dryer. A small shed with storage above the bath area gives us more than adequate space for our junk. The real beauty is that it is paid for, has room on the property for our RV and all property maintenance such as lawn care and even including our water supply is included in the extremely low HOA fee. We are truly living the retirement dream. After the initial investment, a person can easily live a great life on a minimal social security income.

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