One of the most common retirement tips is to sell your big house, move to a smaller one, and put your savings away. But does it actually work?
To explore the issue, I asked ChatGPT if downsizing really saves money in retirement. My goal was not to find out if artificial intelligence (AI) could provide great financial advice.
Instead, I used her broad guidelines as a guideline for what to research, then checked those things against recent surveys, housing reports and financial data to get a more realistic answer. Here’s how ChatGPT tips work.
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ChatGPT began by noting that housing is typically a retiree’s biggest bill. Larger homes typically mean higher property taxes, insurance, utilities, and maintenance costs. A smaller home promises to ease those bills, as well as the ability to simplify life and free up equity for other purposes. It can also mean less cleaning, easier mobility as you age, and less daily stress—benefits that are often just as important as money.
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However, wanting to downsize and actually doing so are two different things. Many older people prefer to stay where they are until circumstances change. AARP’s Home and Community Preferences Survey found that 75% of adults over age 50 want to stay in their homes, and 73% want to stay in their communities. However, 44% expect to eventually need to move, with rising rent or mortgage payments (71%), maintenance costs (60%) and property taxes (55%) cited as the most common reasons for moving.
ChatGPT pointed out that reducing the number can save money. “A smaller home typically means lower property taxes, insurance, utilities and maintenance, freeing up equity you can use elsewhere,” ChatGOT wrote. The numbers confirm this.
Zillow reported that US housing supply in 2025 mid-2018 was the highest since 2020, and more than a quarter of housing units fell. These conditions can help retirees sell at a high price and find a smaller home for less. At the same time, Redfin found that the median home sales price in the U.S. reached $396,500, an all-time high. This means many retirees could sell at a high price.
There is also the ownership factor. ICE Mortgage Technology estimates that U.S. homeowners have a combined $11.5 trillion in equity, an average of about $212,000 per household. For retirees, downsizing is one of the easiest ways to unlock that money.