Research Reveals Majority of Retirees Likely to
Move at Least Once During Retirement, With 30 Percent Moving into
Larger Homes
Sixty-five percent of retirees say they are living in the best
homes of their lives, according to a new Merrill Lynch study
conducted in partnership with Age Wave. With newfound freedom from
work and family restrictions, fewer home-related financial
concerns, and unprecedented longevity, retirees are more empowered
to pursue a home that fits their desired lifestyle and changing
priorities. The study, “Home in Retirement: More Freedom, New
Choices,” also found that 64 percent of retirees are likely to move
at least once during retirement, with 37 percent having already
moved and 27 percent anticipating doing so.
“How and where our nation’s aging population chooses to live
will have widespread implications on the way homes are designed,
the resources people will need, and how communities and businesses
nationwide should prepare,” said Andy Sieg, head of Global Wealth
and Retirement Solutions for Bank of America Merrill Lynch. “For
most retirees, their home is more than just a financial
consideration – it’s a place where family and community come
together, and can represent treasured memories or
independence.”
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
million1. 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.
The new research explores priorities and concerns of retirees
and pre-retirees when choosing the type of homes and communities
they hope to live in during retirement. Based on a nationally
representative survey of more than 3,600 respondents, this landmark
study also examines the powerful connections people have to where
they live. This research is the latest in a series of studies
exploring seven life priorities top of mind for people as they move
to and through retirement, including health, home, family, finance,
giving, work and leisure.
Home free in retirement
Throughout most of people’s lives, where they reside is
determined in large part by work and family responsibilities.
However, as people enter their late-50s and 60s they approach and
begin to cross what this study reveals as the “Freedom Threshold,”
with retirement representing a gateway to unprecedented freedom to
choose where to live. The study found that:
- By age 61, the majority of people feel
free to choose where they most want to live.
- Retirees are more than twice as likely
to say they are free to choose where they want to live when
compared to pre-retirees (67 percent vs. 30 percent).
- Four out of five (81 percent) Americans
age 65+ are homeowners, and among them, 72 percent have fully paid
off their mortgage2.
Retirees on the move: The “downsize surprise”
With new freedom to decide where they want to live, many
retirees move to a different home, community or part of the country
– with an estimated 4.2 million retirees moving into new homes last
year alone3. Retirees’ top motivations for moving include being
closer to family (29 percent), reducing home expenses (26 percent),
and changes in health (17 percent) or marital status (12
percent).
- Many people assume they’ll downsize
once retired. However, the study found that half (49 percent) of
retirees didn’t downsize in their last move – and, in fact, 30
percent moved into larger homes.
- Retirees’ top reasons for upsizing were
to have a home large and comfortable enough for family members to
visit (33 percent) or even live with them (20 percent). According
to this study, today one out of six retirees (16 percent) has a
“boomerang” child who has moved back in with them.
- Retirees who did downsize (51 percent)
cite greater freedom from the financial (64 percent) and
maintenance (44 percent) burdens of a larger home among their top
reasons.
“With increasing longevity and greater freedom, it’s not
surprising that so many retirees are striving to make their homes
even more fulfilling,” said David Tyrie, head of Retirement and
Personal Wealth Solutions for Bank of America Merrill Lynch.
“Achieving your dream home in retirement requires careful
forethought and preparation. Whether moving or staying put, it’s
important to carefully consider expenses associated with current
goals and future priorities, including potential challenges during
later years.”
Among retirees who have not and do not plan to move during
retirement, the top reasons include their deep emotional connection
with their home (54 percent), close proximity to family (48
percent) and friends (31 percent), wanting to remain independent
(44 percent), or because they simply can’t afford to move (28
percent). Prior to age 55, more homeowners say the financial value
of their home outweighs its emotional value. As people age,
however, they become far more likely to say their home’s emotional
value is more important – as cited by nearly two out of three
people (63 percent) age 75 and older.
Retirement hotspots
Among people age 65+ who moved last year, most (83 percent)
chose to remain in the same state; however, roughly one out of six
(17 percent) relocated to a different state or part of the
country4. Looking ahead, where pre-retirees say they want to live
in retirement provides a glimpse of how America may be reshaped in
the coming years:
- Sixty percent of pre-retirees
anticipate staying in the same state or region, while the remaining
40 percent see retirement as a chance to try living in a new part
of the country.
- To a large degree, where pre-retirees
say they want to stay or move to in retirement mirrors where
today’s retirees say they are the happiest. For instance, roughly
four out of five pre-retirees living in both the South Atlantic (80
percent) and Pacific (77 percent) regions say they want to continue
living there in retirement – two of the top three regions where
current retirees give the highest marks among ideal places to
live.
- Among pre-retirees who want to move to
a different region once retired, the South Atlantic is the clear
winner – with 39 percent saying they would most want to move to
that region, followed by the Mountain (25 percent) and Pacific (16
percent) regions.
Home improvements
With age and retirement often come more flexibility, time and
financial resources for home improvements. In fact, age 55+
households account for nearly half (47 percent) of all spending on
home renovations – about $90 billion annually5. While some retirees
modify their home to make it more age-friendly, many also renovate
to make it more attractive or versatile. For instance, renovations
made by retiree homeowners age 50+ who plan to stay in their home
throughout retirement include:
- Creating a home office (35
percent).
- Improving curb appeal (34
percent).
- Upgrading a kitchen (32 percent) or
bathroom (29 percent).
- Adding safety features to accommodate
aging (28 percent).
- Modifying home to live on one floor
should there be trouble with stairs (15 percent).
Many retirees are also interested in new technologies that can
make their homes more convenient, connected, secure, and easier to
maintain. For instance, 80 percent are interested in innovative
ways of reducing their home expenses, such as smart thermostats or
apps to control appliances, while 58 percent are interested in
technologies to help maintain their home, such as cleaning robots
or heated driveways.
Health and home in later retirement
Though people enjoy many new freedoms during retirement, health
and care can become significant factors when choosing where to
live, particularly as people reach their 80s. Among people age 85+,
three-quarters (74 percent) have difficulties with daily
activities, including housework or getting around the home6. And
while the average age of people entering assisted living is 857,
people overwhelmingly prefer to receive extended care, if needed,
in their own home (85 percent).
“The good news is that there have been tremendous innovations in
both technologies and home care services that enable retirees to
live independently even if they face health challenges,” said Ken
Dychtwald, Ph.D., founder and CEO of Age Wave. “In fact, as more
boomers enter their retirement years with more freedom and new
choices, we will see a growing number of homes, communities and
technology innovations designed to meet people’s needs and desires
throughout every stage of retirement.”
To download “Home in Retirement: New Freedoms, More Choices,”
visit www.ml.com/retirementstudy. This report is the fifth in a
series of in-depth studies focusing on seven life priorities, as
defined through Merrill Lynch Clear®. Merrill Lynch Clear is a
pioneering approach designed to connect people’s lives to their
finances and help them live their best life in retirement. To
explore additional content and resources related to these seven
life priorities, visit www.ml.com/retire.
1 Joint Center for Housing Studies of Harvard, 2014 (data for
2015 – 2025)2 Bureau of Labor Statistics, 20133 Age Wave
calculations based on survey responses and U.S. Census data, 20144
Age Wave calculations based on U.S. Census, 20135 Joint Center for
Housing Studies of Harvard, 2013 and 2014; Age Wave calculations6
Centers for Medicare and Medicaid Services, 20097 “Overview of
Assisted Living,” 2009
Age WaveAge Wave is the nation’s foremost thought leader on
population aging and its profound business, social, healthcare,
financial, workforce and cultural implications. Under the
leadership of founder and CEO Dr. Ken Dychtwald, Age Wave has
developed a unique understanding of the body, mind, hopes and
demands of new generations of maturing consumers and workers and
their expectations, attitudes, hopes, and fears regarding
retirement. Since its inception in 1986, the firm has provided
breakthrough research, compelling presentations, award-winning
communications, education and training systems and results-driven
marketing and consulting initiatives to over half the Fortune 500.
For more information, please visit www.agewave.com. Age Wave is not
affiliated with Bank of America Corporation.
Merrill Lynch Global Wealth ManagementMerrill Lynch Global
Wealth Management is a leading provider of comprehensive wealth
management and investment services for individuals and businesses
globally. With 14,085 Financial Advisors and $2 trillion in client
balances as of December 31, 2014, it is among the largest
businesses of its kind in the world. Merrill Lynch Global Wealth
Management specializes in goals-based wealth management, including
planning for retirement, education, legacy, and other life goals
through investment, cash and credit management. Within Merrill
Lynch Global Wealth Management, the Private Banking and Investment
Group focuses on the unique and personalized needs of wealthy
individuals, families and their businesses. These clients are
served by more than 150 highly specialized Private Wealth Advisor
teams, along with experts in areas such as investment management,
concentrated stock management and intergenerational wealth transfer
strategies. Merrill Lynch Global Wealth Management is part of Bank
of America Corporation.
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