Retirement Plan Ideas: Join The Tiny House Movement

small house in a man's handOne of the purposes of a retirement plan is to make sure that your finances will not fall short when you need it the most. This is a time in your life when you stop working to support yourself. You will leave the workforce and spend the rest of your life in rest and relaxation – at least, that is the ideal situation.

However, not everyone is able to retire comfortably because of financial difficulties. We all want to avoid debt problems but what can you do if you still have a huge balance in your mortgage? How can you possibly save enough in time for retirement or make your funds last in retirement when you still have to pay off your mortgage loan?

Well how about this for an idea in your retirement plan: tiny homes.

There is this thing called the Tiny House Movement that is defined as a social movement of people who are taking downsizing to the next level. They are literally living in tiny houses. It is not even big enough to be called small. These homes average between 100 – 400 square feet. A very huge difference compared to the average American home of 2600 square feet.

Based on The Tiny Life website, the popular reason for joining this movement is for environmental and financial concerns. According to the definition provided in this site, a typical American family will spend from ⅓ to ½ of their income on their homes. They mentioned how this causes most households to end up living from paycheck to paycheck. But that can change with the a tiny home.

How downsizing in tiny homes can deal with major concerns of retirees

According to a 2013 Merrill Lynch Retirement Study (in partnership with Age Wave), Americans are concerned about 5 things when they retire.

  • Health. Specifically, they are concerned about the rising costs of medical and health care. This is actually the top concern in 2013. The rising cost is actually rising faster than the inflation rate.

  • Insufficient funds. The second concern is having insufficient funds for retirement. While there are formulas used, there is the uncertainty in the future that makes people worry about falling short in their funds.

  • Family members. Another concern is having a family member struggling financially and having to assist them.

  • Home and community. The fourth concern is where they will live and the people they will share it with in the neighborhood.

  • Financial advice. The last concern is where to get guidance – despite the obvious need to be more self reliant.


So how does a tiny home fit in your retirement plan if you have to deal with all of these concerns? Let us go through them one by one.

The concern that can be direct addressed by a tiny home is the fourth concern – which is the home and community. A tiny home is usually made to be mobile. It is small enough to be hooked in a pickup truck or something similar. If you do not like the community that you settled into, it is very easy to just pack up and leave.

Tiny homes also require very minimal cost in their upkeep. You do not have to pay too much money in utilities because it will not cost too much energy to heat or cool – since it is very small. You will also be discouraged from buying too much furniture or items in the home because there is simply no space for it. You can live on a lower household budget and that takes care of your concern for your insufficient funds.

And since you have solved the fund problem, your retirement plan can allot more money into your health care expenses. Your can put aside a bigger percentage as your emergency stash in case you or your spouse need some medical care. You will get rid of the stress and worry that comes with the knowledge that you cannot afford your medications.

You will also have enough cash to help out any family member who could struggling financially. Of course, they cannot move in with you but since you have freed a lot of your money, you have a lot of extras in your account. You do not want them to rely on your entirely though. So make sure you make a wise decision about this.

The last concern is really about being self reliant and there is nothing more independent than having a house that you can move around. You need to really think about how you can easily manage your life by living in a very mobile home.

There are several issues to solve as you create your retirement plan. You may want to go through with all of them to make sure that you will cover all the loopholes. Make sure that you can foresee the possible obstacles that you will face in retirement.

Benefits of a smaller home in retirement

One of the obvious benefits of a smaller home is in lowering your monthly expenses. In fact, that is one of the specifics that will be included in your retirement plan. But how much can a tiny house really save you?

Here are some interesting statistics from The Tiny Life website.

  • 68% of tiny house owners do not have mortgage payments.

  • 55% of tiny house dwellers have more savings. The average savings is $10,972.

  • 78% of tiny house dwellers own their homes.

  • It only takes $23,000 to build a tiny house – compared to the total $481,704 of a traditional home.

  • 2 out of 5 tiny house owners are 50 years old and above.

  • 65% of tiny house dwellers have zero credit card debt.

  • 32% of tiny house dwellers have more than $10,000 in their retirement fund.


In the upkeep alone, you can really save a lot when you live in a tiny house. As mentioned, a small space does not require too much heating or cooling efforts. If you are worried about the space, you don’t have to! Most of the time, retiring would mean it is just you and your spouse. What will you do with all the space in your home?

Also, it is fun to design a tiny house. A lot of people make it into their own project. Although the total area is quite small, you can rearrange the proportions depending on your priorities. If you love to cook, make the kitchen a little bigger than the original design. You have to design your home to have storage in places that you never thought it should have.

The great thing about a tiny house is it will encourage you to go out and enjoy the sights and sounds around you. Set up your living room or dining area outside your home. Of course, they need to be easily packed up when you are done. But think about how big your backyard or front yard can be.

A tiny house may be putting your retirement plan downsizing to the extreme but you may find it to be quite refreshing and liberating too. Since you do not have space for a lot of things, you will be forced to let go of a lot of material things. You will only buy the clothes that you need. You will only have enough shoes. All of these will not matter because you do not need to dress up for work anyway. What you will keep with you are only the essentials and you will find that your life will be a lot less complicated because of it.