Retirees Living Large

By Ryan Dosen

 

Fewer retirees are downsizing, many are upsizing, and the vast majority are actually living in the nicest home of their lives. Contrary to the common belief that people will generally buy and live in smaller homes as they ease into retirement, a recent study conducted by Merrill Lynch and Age Wave reveals that today’s retiree thinks differently, and has many reasons for doing so.

 

Freedom to Own Their Best Homes

According to Merrill’s study, “retirees say they have unprecedented freedom to choose where they want to live, including freedom from many work and family obligations that can dictate home choices, as well as a greater freedom from home-related financial worries and mortgage payments. As a result of this newfound flexibility, the majority of retirees say they’re living in the best home of their lives.” In fact, Merrill’s study reveals that retirees are twice as likely as pre-retirees to say that they’re free to live where they want (as opposed to living in a place dictated by life’s responsibilities), and that two-thirds of retirees are now living in their best home.

Merrill’s study found that 81 percent of people aged 65 and older are homeowners, and that 72 percent of these homeowners enjoy the luxury of having no mortgage at all. Home equity among homeowners also peaks in the 65+ age group. With an average of over $212,000 in home equity, fewer work and family obligations, and a solid majority not even facing monthly mortgage payments, many people aged 65+ are actually viewing this retirement age as a time of empowerment and greater freedom to live in a bigger and better home.

 

The “Downsize Surprise”

It is widely assumed that once our kids are grown and we are retired, we will downsize and move into a more modestly-sized home. There will be no reason to take on the expense of maintaining a larger home and no need for the extra bedrooms and space. We will enjoy a thriftier, more streamlined existence.

Somewhat surprisingly, it turns out that only about half of retirees downsize when they decide to move. 30 percent of today’s retirees are actually buying larger homes. But after only just recently emerging from a scary recession that left many people’s finances in shambles, why would so many retirees be looking to take on more house and overhead?

First, as alluded to above, these retirees may be the group that is best equipped, financially, to take on the expenses of bigger homes. Second, there are a few key motivating factors that are leading our retirees to supersize their homes.

33 percent of retiree upsizers say that they chose to buy a bigger home so that it would be large and comfortable enough for family members to visit and stay with them. 20 percent of retiree upsizers are making more room for additional family members to actually live with them. In fact, 16 percent of all retirees have a “boomerang” adult child who has moved back in. Only 19 percent of retiree upsizers were buying bigger for reasons of prestige.

 

What We Can Learn From Retirees

I think it speaks volumes that retirees, finally able to enjoy financial freedom and fewer familial responsibilities, use their financial freedom to create a setting designed to attract and bring family members back into their lives. It tells me that there are far worse things than bills rolling in and the pressure of mouths to feed. It tells me that being alone and not being surrounded by loved ones isn’t worth all the money in the world.

 

– Ryan Dosen manages The Wayne Megill Real Estate Team of Keller Williams – Brandywine Valley in West Chester, PA. Contact Ryan Dosen to inquire about buyer or seller representation or to learn more about a career in real estate by emailing ryan@waynemegillteam.com or calling 610-399-0338.

 

This article was published by 21st Century Media and the Daily Local News (West Chester, PA). To read this article on the the newspaper’s site, please visit the Daily Local News.

To view all of Ryan Dosen’s 21st Century Media real estate columns, visit http://www.dailylocal.com/search?text=dosen.