The traditional to-do list for couples approaching retirement includes several familiar elements: signing up for Medicare, deciding when to take Social Security, figuring out what to do about the 401(k), and so on. But what about selling the big family home and downsizing to the smaller house with lower costs and less maintenance? A significant number of baby boomers are looking at the downsizing option and saying, “Not so fast – we’re staying put.”
Instead of Getting Ready to Downsize, Many Boomers Say, “No, Thanks”
This trend toward staying in the home you live in predates the coronavirus pandemic – in fact, we first reported on it one year ago, when we came across this article about boomers and housing in USA Today. “It’s always been a sort of final chapter of the American dream,” says writer Paul Davidson: “Get married and have kids. Buy a house. Move to a bigger house. Downsize to a smaller one. But a growing number of aging baby boomers are saying, ‘No, thanks’ to downsizing, choosing instead to remain in the same sprawling houses in which they raised kids and created lifelong memories.”
Just as they have done since their college days in the 1960’s and 1970’s, baby boomers are charting their own course when it comes to housing. This trend, says USA Today, is having a profound impact on the U.S. housing supply – and, we think, could create challenges down the road as some of these boomers continue to grow old in houses that aren’t well-suited for aging in place.
Advantages of Downsizing Fail to Convince Many Aging Boomers
Everyone, even the average boomer, probably knows the upside of downsizing. “A more modest home typically means less upkeep,” writes Davidson, not to mention “a potential financial windfall as a big chunk of the proceeds from the sale of the larger property can help bolster retirement nest eggs.” But many boomers – the oldest of whom will turn 75 in the next year or so – refuse to be tempted.
“Boomers, however, are defying the traditional bounds of advancing age just as they rebelled against the establishment in the 1960s and work- and family-centered values in the 1970s in favor of self-fulfillment. ‘They have refused to follow what the traditional expectations were,’ says Barbara Risman, a sociology professor at the University of Illinois at Chicago.” According to the article, even those boomers who are opting for downsizing are waiting until later in life to make the move.
There Are Valid Reasons Why Boomers Aren’t Ready to Downsize
According to a Chase bank survey of more than 750 boomer homeowners released earlier last year, more than half say they’ll “never move from their current home,” says USA Today. That’s about ten percent higher than the result of a similar survey two years ago, which might be an indicator that the sentiment against downsizing is on the rise. The article suggests several possible reasons for the choice to stay put:
- They’re Still Working. “Many boomers are staying in their longtime homes and communities because they’re deferring retirement,” says USA Today. Labor Department statistics show that about 20 percent of Americans 65 and older are either working or looking for work, compared with 12 percent in 1996. Many boomers are still in good health and want to keep working in order to beef up their retirement savings, some of which was lost in the recession over a decade ago.
- Their Kids Still Live at Home. Zillow reports that 14 million young adults in the 23-37 age group – about 22 percent – still live with their folks, compared with about 12 percent in 2001. Some boomers are deferring the decision to downsize because the “family home” is still the family home.
- There’s No Place to Move. “There’s a dire shortage of less expensive entry-level houses across the country,” USA Today This drives up prices for the kind of homes into which downsizing boomers might want to move.
Some Boomers Aren’t Ready to Downsize – Instead, They Plan to “Upsize”
There is also a growing body of data suggesting that many younger boomers who do want to move in retirement actually plan to upsize, not downsize. As this 2019 article published on a blog called NewHomeSource says, “A recent survey by Del Webb found that 65 percent of younger baby boomers and older Gen Xers, all between 50 and 60 years old, don’t plan to downsize. They prefer their next home be the same size (43 percent) or larger (22 percent) than their current home.”
This mirrors a Merrill Lynch study which found that “30 percent of recent retirees had moved into a larger home and 19 percent moved into the same-size home” as the one they left. Having room for family and friends was by far the biggest reason.
Two Important Retirement-Planning Announcements from AgingOptions
At AgingOptions our chief desire is to help you prepare for the kind of retirement you’ve always dreamed of having. Toward that end, we want to share two important announcements that are designed to facilitate your LifePlanning process even during this period when most of us are required to avoid gathering in groups.
First, Rajiv Nagaich has scheduled several of his popular, free LifePlanning Seminars in the form of webinars that you can watch conveniently at home. Simply visit our Events Page and register for the webinar of your choice.
Our second announcement: in cooperation with our partners at LifePoint Law, we are excited to launch a ground-breaking new service called the LifePoint Law Emergency Legal Kit. Without leaving your home, you can now consult with a LifePoint Law attorney who will work with you to prepare and sign a complete set of vitally important legal documents including both Financial and Healthcare Powers of Attorney, a Living Will/Advance Directive, a Will or Trust, and much more. Click on the link or call us at AgingOptions and we’ll explain this excellent service to you.
Reliable information has never been more important – and that’s our promise to you at AgingOptions and LifePoint Law. Age on!
(originally reported at www.usatoday.com)