Merrill Lynch/Age Wave study finds that as people enter their 50s and 60s, they have more freedom to choose where they want to live
Most retirees will move at least once during retirement and almost a third will move into houses that are larger than their current home, according to a Merrill Lynch study conducted with Age Wave, a think tank on issues related to aging.
The analysis of 3,638 retirees and pre-retirees found that as people enter their 50s and 60s they have more freedom to choose where they want to live, as that decision is determined less by having to be near a job, living in a good school district, or raising a family. Four out of five Americans age 65 and older are homeowners, and more than seven in 10 of that group have paid off their mortgages. Home equity among households 65 and older is more than $200,000, so older Americans feel more empowered to pick where they want to live.
The NAHB’s latest 55+ Housing Market Index shows that builders are confident about their prospects with this buyer group. Demand has partly been fueled by rising home values, which makes selling their existing home at a favorable price easier for older homeowners, so they can rent or buy a new home in a 55-plus community.
Sixty-four percent of retirees say that they are likely to move at least once during retirement, while 37 percent have already done so, and 27 percent anticipate doing so. Among retirees who moved last year, 83 percent stayed in the same state. Only 7 percent moved into an age-restricted retirement community. Retirees in the South Atlantic and Mountain states gave highest marks for satisfaction with their climate and cost of living. Sixty percent of pre-retirees anticipate staying in the same state or region, and the remainder see retirement as a chance to try living in a new part of the country.
Most pre-retirees expect to downsize when they retire, but 49 percent of retirees didn’t scale down with their last move, and 30 percent moved up. The top reason given for upsizing is that retirees want a home that is large and comfortable enough to accommodate their family members for visits and stays.
Sixteen percent have a boomerang adult child who has moved back in, a reason that tracks with U.S. Census Bureau figures showing that multigenerational family households doubled between 1980 and 2010 from 11 percent to 22 percent. Among the retirees who moved down, 51 percent did so to lower monthly housing costs and maintenance burdens.
Households 55 and older account for 47 percent, or about $90 billion annually, of all spending on home renovations. The most popular reason to remodel was creating a home office followed by improving curb appeal, upgrading the kitchen, and upgrading the bathroom. PB