Baby Boomers Are On the Move
Baby boomers are getting older, but not slowing down. They’re not only living longer and enjoying active lifestyles, they're also re-evaluating their current living situations.
Some baby boomers have paid off mortgages, or have mortgages that are nearly paid off. This, however, doesn't suggest they're staying put. According to a 2015 Merrill Lynch study, an estimated 4.2 million retirees moved into a new home during the previous year, and about “two-thirds of retirees had plans to move at least once during their retirement.”
Why are retirees picking up and moving at this time in their lives? The reasons vary. But the survey identified two common trends.
1. Live Closer to Family
As boomers retire and leave the workforce, they have more time to spend with their families. For those who live far away from children and grandchildren, retirement also gives them the freedom to move closer and reconnect with their families.
"In retirement, you have the chance to live anywhere you want, or you can just stay where you are. There hasn't been another time in life when we've had that kind of freedom,” said a participant in the Merrill Lynch study.
2. Reduce Home Expenses
Monthly income from a 401(k), pension, IRA, and Social Security provide retired baby boomers with ongoing monthly income. But sometimes, this income is only a fraction of their income while working full-time. To stretch their retirement dollars and enjoy a comfortable life, many baby boomers have no other choice than to reduce their expenses. And since housing is often the biggest monthly expense, it only makes sense to find a cheaper home.
Options include selling a current home and moving into a cheaper property, or moving to an area with a lower cost-of-living and getting more bang for their buck.
But although many baby bloomers are on the move and exploring their real estate options, downsizing isn’t the trend for every member of this generation. Their children might be out of the house, but some boomers aren’t giving up their space—at least not yet.
The Merrill Lynch study also found “that 3 in 10 baby boomers choose to upsize after retirement.” Those who relocate to an area with cheaper prices often discover they can purchase a property that’s larger than their previous home, yet pay less for the property. Their homes become a place for family gatherings, and additional square footage provides flex space for a home library, an office, a workout room or a reading nook.
There’s no rule that says retirees have to downsize or live in their current homes forever. Retirement offers a new kind of freedom. Whether you want to live closer to family or reduce your housing costs and enjoy more expendable income, the right type of financing can help you achieve your goals. Have a question about getting a mortgage? Contact us today to discuss your options.