So much for the conventional wisdom of downsizing your home when you retire. According to a recent survey from Merrill Lynch 49 percent of retirees did not downsize at retirement, and up to 30 percent actually moved into larger homes. (Keep in mind the survey of nearly 6,000 people included about 39 percent who had investable assets of $250,000 or more.)
During the next decade, the number of age 65+ households in the U.S. will increase by nearly 11 million, while growth in the number of households across all other age groups will be less than 2 million. This tremendous growth among older households is driven by powerful demographic forces, including the massive baby boomer generation now moving into their retirement years and increasing longevity leading to longer retirements.
Many retirees are renovating their current homes in order to “age in place.” Contractors are calling it a baby-boom building boom. Retirees are wanting to remain in their homes and communities as they age, but recognize that living spaces can become unsafe and difficult to navigate. Several people in their 50s and beyond are retrofitting houses, building additions or constructing new digs with age-friendly features. While remodeling can be pricey, given the high cost of care in an assisted-living facility or nursing home, such improvements can make sense in the long run. Common age-friendly features include expanded doorways, adding gentle slopes instead of steps, recessing tripping hazards such as rugs, tile and wood transitions and main-floor masters with age-friendly bathroom features.
Other retirees are looking to relocate and are choosing to upsize in order to accommodate children and grandchildren. Some 33 percent say in the survey they wanted a larger home to make family members more comfortable while 20 percent stated they want the option to have family live with them. Typically, in this situation, buyers are choosing homes with a different configuration than they would have purchased while raising a young family. Many are choosing layouts with a “bunk-room” with lots of beds for the grandkids, while several are looking for one or even two home offices since they are leaving corporate offices behind. Most are looking for areas with large living spaces in order to fit several family members at once.
Overall, the study found that the majority of retirees (65 percent) of respondents believe they are living in the best home of their lives!