Traditionally, those who were approaching retirement age would trade in their larger homes once their kids grew up and moved out, and downsize to one that was both more affordable and more practical for a two-person family. The smaller homes also allowed them to start contributing more to their retirement funds since they were likely paying less on their home loans, utilities and upkeep.
But now, boomers, who were expected to follow in the footsteps of previous generations for how they approached the empty nest phase of their lives, are not doing so. Some are hesitant to enter the housing market while it's still in a state of repair, and are instead paying to renovate their homes to more closely fit their needs as they age. Many who put their homes on the market in recent months found out the hard way that selling a property these days is easier said than done, even with interest rates sinking to near all-time lows.
"The challenge for them is that we're in a market where people need X price to move and they can't get the number," financial planner Raymond Carota of Brandywine Financial Group in Center City Philadelphia, told the Philadelphia Inquirer. "My recommendation is that they rent the property to obtain a revenue stream, refinance to reduce the mortgage if necessary and keep the tax advantage."
In general, the boomer generation is reshaping how experts view the housing market for aging consumers. Many are making decisions that older generations did not, including staying in their larger family homes. Some are moving to foreign countries where care and property are less expensive as a means of making retirement savings last longer.
Experts also have noticed that boomers are straying from many other conventions followed by previous generations, such as staying in their careers for longer periods of time to bolster their savings, and even working part-time after they retire to supplement their income.
What unconventional housing choices have you noticed among today’s retirees?