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We've saved $1.1 million, but we need to downsize in order to retire. We asked wealth planners for advice.
By
Maurie Backman
published
11 March 2026
in Features
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Question: We're 62 with $1.1 million saved. We'd planned to downsize from our $1.2 million home and retire in a year with the proceeds, but our daughter and two grandchildren live with us. My wife says we should stay for their sakes. I love them all, but I so want to retire; I'm ready to ask them to move. How can we navigate this financially and emotionally?
Answer: Age 62 is the earliest age to sign up for Social Security. For this reason, it tends to be a popular time to start contemplating retirement.
If you and your spouse are 62 with a $1.1 million nest egg, you're not in bad shape by any means. Your savings, combined with decent Social Security checks, could make for a reasonably comfortable lifestyle if you keep your expectations in check. But if you own a $1.2 million home with a lot of equity, downsizing could change your financial picture substantially.
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Sign upImagine that after selling your home and buying a smaller one, you're left with $500,000. That adds meaningfully to your savings, giving you more leeway to spend throughout retirement.
But while that decision might seem like a no-brainer, especially if you're ready to move on, if you have a daughter and two grandchildren living with you, things become more complex. Selling your home could mean displacing your beloved housemates and causing them a great deal of stress.
The situation gets even trickier if you're gung-ho on downsizing, but your wife feels compelled to stay put so your daughter and grandkids don't have to move. Now, you're not only grappling with potential feelings of guilt, but you're also in a place where you risk conflict if you don't come to an agreement.
The good news, though, is that there may be solutions that work for everyone involved.
Research found that "98% of parents say they would allow an adult child to live with them after age 21."
Downsizing could still be a viable option
If you buy a much smaller home, you may no longer have the space to house your daughter and grandkids. But that doesn't mean you can't continue to help.
Andy Smith, Executive Director of Financial Planning at Edelman Financial Engines, says, "Just because you are switching houses doesn't mean you need to cut off helping your daughter or grandchildren. You're just shifting how you plan to help."
As Smith explains, if your daughter and her kids are living with you due to a financial need, you can continue to help by contributing a rental deposit, offering a small monthly sum to supplement her income, or helping with childcare so she can work more hours or save on daycare.
Granted, that support might strain your financial resources. So you'll need to run the numbers carefully to see what you can afford.
If your daughter and grandkids are living with you now, for example, but they contribute toward food and utilities, it may not be costing you much (or anything) extra to have them under your roof. Sending your daughter a $500 monthly check in your current situation is a different story.
However, if downsizing out of a $1.2 million home leaves you hundreds of thousands of dollars richer, offering that support may be doable. This gives your daughter the benefit of independence, and you and your spouse the freedom to focus on yourselves and your own needs.
Set clear expectations
It may be that your daughter and grandkids are living with you temporarily because of a recent divorce, loss, or bout of unemployment. If so, it may not be unreasonable to postpone your downsizing plans a bit longer so your daughter can get to a more secure place.
But Smith says it's important to set limits on how long you'll continue your current arrangement. And if you'll be downsizing as planned but offering financial support, it's crucial to set expectations.
"At some point, the bank of Mom and Dad has to close its doors," Smith says. "That doesn’t mean you stop loving or supporting your children. It means having honest, sometimes difficult conversations about what happens if you continue living on their timeline instead of your own."
Smith warns that if you consistently put your plans on hold to fund a grown child's life and help support grandchildren, you risk compromising your own long-term security. And in a more extreme situation, you could even risk becoming financially dependent on your daughter (and/or other adult kids you might have) down the road.
Do you have a tricky money situation? We want to hear about it for an upcoming advice column. We're interested in retirement-related financial dilemmas, especially those that impact relationships with partners, friends and family. You will remain anonymous. Submit your question to [email protected]. Not all questions will be published.
Deana Healy, CFP and Vice President of Financial Planning & Advice at Ameriprise Financial, agrees.
Recent Ameriprise research found that 98% of parents say they would allow an adult child to live with them after age 21. But if that upends your plans, it's important to be up front about it.
"In situations like this, open communication is a crucial first step," Healy says. "Honest conversations about expectations, timelines, and what each person needs can help reduce stress and bring clarity."
Whether you decide to move forward with downsizing, postpone your move temporarily, or come up with some other transitional plan or arrangement, Healy says it's important that you all align on goals and figure out a solution everyone involved is comfortable with.
"Establishing shared priorities can help bring structure to what might otherwise feel like a complex situation," she insists.
Read More
- We're 65 With $3.9 Million. Should We Give Our Adult Children Their Inheritance Now to Pay for Daycare and Buy a Home?
- I Want to Retire, but I Have to Keep Working so My Adult Kids Have Insurance
- I Retired at 63 to Enjoy My Free Time but My Grown Kids Want Help With Child Care. I Love My Grandkids, but It's Too Much. What Should I Do?
Maurie BackmanContributing WriterMaurie Backman is a freelance contributor to Kiplinger. She has over a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. She has written for USA Today, U.S. News & World Report, and Bankrate. She studied creative writing and finance at Binghamton University and merged the two disciplines to help empower consumers to make smart financial planning decisions.
