It’s not surprising that downsizing has become a big trend in the United States and other Western countries. After all, we are simply drowning in stuff! How much stuff? Well, according to the LA Times, the average U.S. household contains 300,000 items. 300,000! That’s insane!

Unfortunately, most of us wait far too long to clean out our closets. As a result, we miss out on a big opportunity to increase our retirement savings.

Today, I want to argue that simply moving up your downsizing date from 65 to 50 could have a dramatic impact on your financial future. In fact, depending on your situation, you could save as much as $200,000 extra for retirement, just by downsizing early!

Why 50? By the age of 50, most of us are empty nesters. With our kids out of the house, we have complete control over the stuff in our lives. And, with so much money at stake, why not downsize early?

Here are a few of the benefits to organizing your life at 50 instead of 65.

Downsize Now, Stop Paying Storage Fees and Start Investing Your Savings

The average price for a storage unit in the U.S. is about $90. This doesn’t seem like much, but, let’s run a few numbers and see what would happen if you saved this money and invested it for 15 years.

According to my calculations, if you took the money that you saved each year and invested it at a 7% return (the historical S&P average return after dividends and inflation), you would have $29,000 at the end of 15 years!

By the way, if you had your kids a bit earlier and could start downsizing at 40, you would have about $50,000 after 20 years of compounding!

Move to a Smaller Home Before Retirement

The value of moving to a new home is hard to calculate because everyone’s situation is so different!

If you are still renting, moving from a 4-bedroom to a 2-bedroom could save you $500 a month. Reinvesting your rent savings every year at 7% could leave you with as much as $160,000 more for retirement. Yes, you read that right… investing (and reinvesting) $6,000 a year for 15 years could give you $160,000 more to work with in the best years of your life!

If you own your home, then, moving into a smaller house could free up cash for you to invest. Or, if you still have a mortgage, it could reduce your monthly payments significantly.

I’ll leave it to you to crunch the numbers with a financial professional, but, the bottom line is that some families could save $10,000s, even $100,000s more over 15 years by moving to a smaller house early.

One Man’s Trash is Another Man’s Treasure… Sell Your Old Stuff and Profit

Think about all the stuff that you have in your basement, storage unit and house. It may not seem like it, but, many of the items that you have squirrelled away have value. This is especially true of big-ticket items like furniture, electronics, clothes, bikes, motorcycles, paintings, sports equipment, TVs, game consoles and video games.

This doesn’t even count family heirlooms or items that have high intrinsic value. We’re just talking about the excess weight that your family is carrying around.

According to Bankrate.com, the average renter owns about $20,000 – $30,000 of “stuff.” Since this is an average, it’s safe to assume that older adults are on the higher end of this range – and probably considerably higher than $30,000.

Now, to be clear, this is the replacement value for the items in the average home. This doesn’t mean that you could sell your items for this amount. But, it’s an interesting statistic none-the-less.

Let’s say that selling everything you don’t need on eBay, you end up with $3,000. If you invested this amount in the stock market over 15 years, you might end up with something closer to $8,000.

Free Up Your Cluttered Mind and Reduce Future Spending

Downsizing is a humbling experience. It’s not until you dig into the clutter that you realize just how out of control your spending has become.

When I left the United States to move to the U.K., I managed to fit all of my possessions into one room. This was, of course, after some serious sorting and selling!

Then, when I moved to Switzerland from the U.K., I took my downsizing a step further and packed all of my worldly possessions into 8 suitcases. This is approximately the amount of stuff that I have had for 4 years now.

What I and many other people who have downsized early found is that buying stuff is an addiction. And, like an alcoholic who is confronted by a neighbor about the amount of “recycling” that he or she is doing, it’s not until we really dig deep that we see how big the problem has become.

How big a problem are we talking about? Well, according to the Wall Street Journal, Americans spend $1.2-trillion a year on nonessential goods. That’s about $11,000 per family!

If these numbers match your situation and you could reduce your nonessential spending by 30% and reinvest this amount for 15 years at 7%, you would have an extra $80,000 or so for retirement. That’s huge!

Wrapping it All Up… Downsizing = $200K More for Retirement?

Now, I’m no math wizard. Heaven knows I’ve made my share of financial mistakes. So, you should definitely talk with your financial advisor about the potential impact that downsizing could have in your life.

That said, by my calculations, a couple that canceled its storage unit, moved into a smaller home, sold its old stuff and reduced its spending on nonessential items could save an extra $200,000 for retirement over 15 years.

Best of all, nobody is asking you to sacrifice here. Trust me, when you get to retirement age, you were going to throw away all of your old stuff anyway! So, why not do it a little early and give yourself a better retirement?

Are you considering downsizing? What do you think of the idea of downsizing in your 50s instead of your 60s? What downsizing tips can you share with our community? Please join the conversation!