Baby Boomers say they aren't moving out of their homes (pensions, friendly)
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Interesting study about Baby Boomer plans to transplant or not transplant in retirement and some of the thinking why or why not. Percentages given so obviously there is a mixed bag of feelings.
In a survey of 4,000 Baby Boomer households conducted by the non-profit Demand Institute, 63% of Boomers plan to stay in their current home once they retire.
Much of that has to do with the recession. The financial crisis put an end to years of rapid wealth accumulation, causing the typical Boomer household's net worth to fall to $143,000 in 2013 from just over $200,000 in 2007, according to Federal Reserve data.
Quote:
Not only that, but this generation is also carrying a lot more mortgage debt. The survey found that the median outstanding mortgage balance for 50- to 69-year-olds was $118,000 in 2013, up from $48,743 in 1992.
"Boomers' nest eggs have shrunk dramatically in recent years," said Jeremy Burbank, vice president at The Demand Institute, the non-profit think tank run by the Conference Board and Nielsen. "Financially, this generation is not necessarily ready for retirement, and half of their assets are tied up in their homes."
boomers move
Not everyone is planning on staying put, however; 37% of the Boomers surveyed said they were planning to make a move.
Nearly half of the movers said they wanted to get a bigger place -- and that they intended to spend more money on it. But with a median net worth of just $40,000, this group was among some of the least wealthy surveyed. In fact, the report found that many of those who were looking to "upsize" were also looking to switch from renting to owning.
Those who said they plan to move into a smaller home were much more affluent, with a median net worth of $322,000, the Demand Institute found.
Whatever the size of the home, Boomers seemed generally unconcerned about whether or not it would be "aging-friendly" -- even though a whopping three-quarters of them reported having significant health issues, such as cardiovascular conditions, arthritis, obesity and high blood pressure.
And only one-in-five of the movers said they intend to live in senior housing.
Some good charts and perhaps a keeper article to refer to in future discussions if you want corroboration of points. One of the thoughts is how realistic are the plans of some of those planning to move? Are they planning to move to capture the equity in their homes etc etc?
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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That seems odd to me. When retired I won't have the income to be comfortable with the current house payment and taxes on pensions and SS. Taxes alone are about $600/month now. Despite the recession we currently have over $300k equity and hope to pay cash for a smaller home in a less expensive area. Currently the value is going up 10-12%/year, whether that continues or levels off over the next 4-5 years we would be nuts to stay here. Plus, the two of us don't really need a 3,000 sf house, just for the guests that stay with us for the holidays. Someone else can host or they can stay at a hotel.
It didn't surprise me that the people who were more affluent were planning to downsize; I suspect they became more affluent becase they have a history of making wise financial decisions.
Interesting. I'm sure there are some reality checks coming! Probably in the mail.
I lost a lot of money too but that didn't make it suddenly logical for me to stay in a high COL area, pay high taxes, make mortgage payments, and live in a big house. To me it was logical to cut back, have a small home that was paid for, in a low cost state, with lower taxes. Because of these losses I have had to plan for a future with less. I think I have done what I can to make it doable and still maintain an OK lifestyle.
I think many of these folks are on the road to figuring out they can't retire at all. At least not with all the bells and whistles they expected to have.
The other question is how realistic are the plans of some of those planning to stay in their current home? Is their home friendly to aging issues?
I live in a family friendly community and lots of people like me have not moved, however, we are seeing some homes go up for sale here and there. Not many.
One of my neighbors told me today she is going to a funeral for a neighbor who just passed at 97. Her husband still lives in the home and the two of them were in the home 33 years!! So, I have some time LOL.
Interesting. I'm sure there are some reality checks coming! Probably in the mail.
I lost a lot of money too but that didn't make it suddenly logical for me to stay in a high COL area, pay high taxes, make mortgage payments, and live in a big house. To me it was logical to cut back, have a small home that was paid for, in a low cost state, with lower taxes. Because of these losses I have had to plan for a future with less. I think I have done what I can to make it doable and still maintain an OK lifestyle.
I think many of these folks are on the road to figuring out they can't retire at all. At least not with all the bells and whistles they expected to have.
What I see is boomers moving in number seldom seen before. Boomers consist of 25% of population and will be retiirng at average rate of 10K a day for next 13 years. 4000 is a small sample with 10k a day retiring. Five years before I retired I would have had to say no; but I moved in end. I wouldn't even think the percent saying they will do it in the end but still numbers doing it are huge compared to past retirees.
Nearly half of the movers said they wanted to get a bigger place -- and that they intended to spend more money on it. But with a median net worth of just $40,000, this group was among some of the least wealthy surveyed. In fact, the report found that many of those who were looking to "upsize" were also looking to switch from renting to owning.
This sounds dangerous, a possible recipe for a new wave of foreclosures. It is incredibly expensive these days to own a house, with all expenses taken into account. Of course, this median net worth cited, above, means not a lot without actual income figures included in the picture. Many retire with fewer assets but large pensions + SS, and their income alone would qualify them for buying.
I know people who just use their current homes as a credit card.
Don't think they'll ever be able to move.
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Nice to know
