Beyond the Numbers Financial Advisor eNewsletter
More Boomers are not downsizing for retirement
A growing number of baby boomers plan to stay in their current home rather than downsizing in retirement, according to a survey by Chase Bank.
Half (52%) of boomers (who are now age 55 to 73) say they will never move from their current home. But even among those who plan to move, 43% expect their next home to be the same size as their current one, and 22% want to move to a larger home.
Pre-retirees who anticipate funding part of their retirement by moving to a smaller home should take note that there can be some important downsides to downsizing.
Accommodating family needs is one of the top reasons retirees choose not to downsize. Many boomers find their millennial children living with them well into adulthood, or “boomeranging” back home when faced with difficult job or housing markets. One in six senior households have younger generations living with them, according to the US Census. Moreover, many choose to remain in a larger home as an attractive place for grandchildren and other family members to visit during their retirement years.
There is also now a shortage of smaller, less expensive houses, pushing up prices and making it less attractive to downsize. From 2012 to February 2019, the bottom third of homes with the lowest prices appreciated an average of 8% a year, versus 5% for the most expensive units, according to an analysis by Trulia.
With mortgages paid off, many boomers are choosing to invest in their current home with improvements, according to the report. This can include renovating their homes to make them more aging-friendly.