Home in Retirement: More Freedom, New Choices
During the next decade, age 65+ households will account for nearly all household growth. This transformation of America is driven by powerful demographic forces. First, the massive baby boom generation is now moving into their retirement years. Second, increasing longevity means more people will live longer in retirement. How and where older adults choose to live will have widespread implications for the different ways homes might be designed, what resources will be needed, and how communities nationwide should prepare for an aging population.
To better understand people’s priorities, hopes, and worries regarding where they live in retirement, in 2015 Merrill Lynch and Age Wave completed a national study, “Home in Retirement: More Freedom, New Choices.” This study is based on a nationally representative survey of more than 3,600 respondents. Key findings include:
Home Free in Retirement
- Throughout most of people’s lives, where they live is determined by their work and family responsibilities, But for many retirement means (1) greater freedom from many of the financial and family responsibilities of home, and (2) greater freedom to live where and how they wish – with fewer limits and restrictions.
- As people enter their 50s and 60s, they begin to cross what this study reveals to be the “Freedom Threshold.” At age 61, the majority of people say they feel free to choose where they most want to live.
- Compared to pre-retirees, retirees are more than twice as likely to say they are free to choose where they want to live.
- Empowered with new options and opportunities, and with greater freedom from many home-related financial worries, two-thirds (65%) of retirees say they are now living in the best home of their lives.
Should I Stay or Should I Go?
- 64% of retirees say they are likely to move at least once during retirement, with 37% having already done so and 27% anticipating doing so.
- Retirees cite “wanting to be closer to family” as a top reason for moving.
- The Downsize Surprise: Pre-retirees who expect to downsize when they retire may be surprised to learn that half of retirees didn’t downsize in their last move. In fact, 3 in 10 upsized into a larger home.
- Retirees say the top reasons to upsize are for family members to visit or stay with them. And so what we see is that for many retirees their homes transform from an “empty nest” to a “welcome home.”
- Retirees living in the South Atlantic, Mountain, and Pacific regions give their geographic the highest marks for meeting their lifestyle priorities and needs.
- Most pre-retirees (60%) anticipate staying in the same state or region, while 4 in 10 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 happiest. For instance, 4 in 5 pre-retirees living in the South Atlantic region and more than ¾ of pre-retirees in the Pacific region say they want to continue living there in retirement.
- Among pre-retirees who want to move to a different region in retirement, the South Atlantic region is the clear winner – with nearly 4 in 10 saying they would most want to move to that region – followed by the Mountain region with 25% and Pacific region with 16%.
Refresh, Remodel, Renovate
- Retirees who don’t plan to move cite “I love my home” as a top reason for remaining where they are. for people age 65+, their home’s emotional value far outweighs its financial value.
- Age 55+ households account for nearly half (47%) of all spending on home renovations – about $90 billion annually.
- While some modify their home to make it more age-friendly, most retirees have renovated their homes to make them more attractive, more comfortable, and more versatile.
- Retirees are not just interested in traditional remodeling and renovation activities. They’re also seeking new technologies that can make their homes more convenient, connected, secure, and easier and less expensive to maintain, such as smart thermostats, cleaning robots and medication reminder apps.
Health and Home in Later Retirement
- Overwhelmingly, retirees say their top preference for receiving extended care, if needed, is to age in place in their own home.
- There has been a significant shift in where people are receiving care. The number of nursing home residents has declined in the past decade, while at the same time the number of people receiving care at home has increased.
- As boomers enter their later retirement years and the need for all types of long-term care increases, new services, technologies, and options will continue to develop to enable people to receive care how and where they most desire.
For the full study, please visit www.ml.com/retirementstudy.