How my tiny home helped me retire early
When Rhonda Jourdonnais turned 62, she began feeling she was ready for retirement. She had worked as a veterinary technician and assistant for 25 years, and wanted to try living off Social Security. But on a fixed income, there was no way she could afford her monthly mortgage and homeowners association fees at the townhouse she owned in Grass Valley, California.
She thought of different ways she could make her vision a reality, and then a drastic idea sprung to mind: She’d live in a tiny home.
Jourdonnais, 64, had followed the tiny-home movement since it began gaining popularity in the early 2000s. “Tiny House, Big Living” premiered on HGTV several years ago, and the TV show rekindled her interest in the movement. She was living in California at the time — where she’d been for five years — but says she wasn’t happy. She envisioned moving back here she used to live, on Whidbey Island in Washington State.
“In California, the housing is too expensive,” Jourdonnais tells MagnifyMoney. “I wouldn’t have been able to retire and still keep up my townhouse without working.”
The monthly HOA fee for her townhouse was close to $400, which would not have been sustainable.
She decided to take the leap in 2015. She sold her townhouse at a profit and put that money into her IRA. In October 2015, she flew to Colorado Springs, Colo., to order her tiny home. She found a company there that had been in business since 1999, and she considered them the most reputable. In December of that year, she retired from her job and in February 2016, she moved into her 8-by-24-foot home on a friend’s six-acre property on Whidbey Island. She pays her friend $200 per month to stay on her property.
“The tiny home made retirement possible,” she says.
Toward early retirement
Jourdonnais says that since moving into her tiny home, she lives on roughly half of the money she did before retirement. Before, she would have had to work until she was 70 to save enough for retirement, and she didn’t feel physically or emotionally prepared for that.
Jourdonnais and many others are turning to tiny-home living as a way to make early retirement possible.
According to Senior Planet, 40 percent of tiny-home owners are over age 50. And there are other advantages that seem tailor-made for older Americans. According to figures cited in a CBS Moneywatch report from 2016, 89 percent of tiny house owners have less credit card debt than the average American, and 65 percent have none at all. Additionally, tiny home owners have about 55 percent more savings in the bank.
Long thought to be a lifestyle primarily for those interested in achieving more peace of mind through fewer objects, it has also become a way for many people to retire earlier with fewer utility costs, lower property taxes and little or no mortgage. (The average home in the U.S. costs $272,000, compared with $23,000 for a tiny home, according to The Tiny Life.)
Though pop culture has made the concept of tiny-home living popular, it’s still quite rare. Only 1 percent of homes purchased in the U.S. are below 1,000 square feet, and the average tiny home clocks in at somewhere between 100 and 400 square feet, according to data compiled by the blog Restoring Simple.
Weathering the challenges
Tiny-home living is rife with challenges, including complicated permit and zoning codes. But Jourdonnais says the biggest ongoing hurdle for her is simply adjusting to the space, especially on cold, rainy days.
“If I get up to go into my kitchen it’s like two steps,” she says. “If I go into my bathroom, it’s two steps. If somebody was claustrophobic, they probably wouldn’t like the lifestyle.”
Her advice to people interested in retiring early by moving into a tiny home is to try it out before buying a property. The U.S. has numerous tiny-home rental communities, which Jourdonnais recommends. “The thing I miss the most is the space,” she says. “It is a really big adjustment. It’s definitely worth it for people to try it out in some of the rental communities.”
But overall, Jourdonnais has loved her new lifestyle. She regularly takes a small pop-up travel trailer to campsites with her dog. (Some people actually travel with their tiny houses, but she does not — she says she doesn’t have a truck big enough to pull it.) And she has already traveled much more in retirement than she ever anticipated.
Jourdonnais has planned her finances so that she can sustain tiny-home living for many years to come, assuming her Social Security remains the same. “I imagine it could be the way I live the rest of my life,” she says, “as long as I stay healthy.”
MagnifyMoney is a price comparison and financial education website, founded by former bankers who use their knowledge of how the system works to help you save money.