They may be aging, but that doesn’t mean they’re changing.
Known for paving their own paths, Baby Boomers are once again defying tradition —this time, when it comes to retirement housing.
Unlike their predecessors, they’re not downsizing.
They’re staying put in their beloved family homes. Even though they may not need as much space. Even though maintaining a larger and older home is costly and tedious. And even though they may have significant equity in their original house that could offset the cost of a smaller one and then some.
Several factors explain the change:
- Boomers, ages 54-73, are working longer. The Labor Department found a nearly 35% increase in the number of Americans 65 or older working in 2016 compared to 2011. Some reasons may be: better health, lack of sufficient retirement savings and rising health care costs. And many may be working to rebuild a nest egg that was damaged by the 2008 recession. Many also work longer because they recognize that increasing longevity means they’ll need to stretch their retirement dollars for longer.
- The kids are back. More adult children than ever before are still living at home, even after college. A 2017 US Census Bureau report found that living at home was the most popular housing choice among 18-34 year olds. That’s 24 million, or one in three, young adults living with their folks in 2015. And in 2016, more young people living with their parents that with a spouse. The large family home is still needed!
- Housing inventory is limited. A tight housing market has fueled higher prices and lower inventory for the exact type of homes downsizers typically look for: smaller, entry-level type houses.
- They still feel young. As sociology professor Barbara Risman from the University of Chicago noted, “Baby Boomers don’t want to become old in a way that has negative connotations…Remaining in one’s old house is part of remaining in the prime of one’s life longer.” Healthy aging is changing today’s seniors, with many remaining engaged in their communities and physically active and mentally strong.
All those factors help explain why many older adults actually want a bigger house. According to a 2019 Del Webb survey of 50-60 year olds who do plan to move, 43% want a house the same size, and 22% want their new home to be even bigger,. The younger respondents explained that they needed a larger home to accommodate aging parents. Others wanted a home large enough to entertain family and friends.
Americans approaching retirement face unique circumstances that impact their retirement housing decisions. Planning ahead and working with qualified financial planners can help current and future retirees prepare better for financially stable retirements.
At Silverman Financial, we meet with our clients annually to review and adjust their portfolios to changing needs. We are experts in supporting financially secure and fulfilling retirements.