Contrary to what you may expect, not all retirees are downsizing. In fact, nearly one-third of retirees are upsizing.
According to Home in Retirement: More Freedom, New Choices, a recent Merrill Lynch and Age Wave study, 49 percent of retiree respondents didn’t downsize in their last home purchase, and, with 19 percent buying a similarly-sized home and 30 percent actually upsizing.
The study also found that 65 percent of retirees say they live in the best home of their lives.
The results of the survey suggest that over the next decade, households of 65 and older members will account for the most household growth, with 10.7 million retiree households expected to grow. Comparatively, the second highest age group expected to have household growth is ages 35 to 44, with only 2.5 million.
According to the report, the high growth is due to several reasons, such as increasing longevity leading to longer retirements, four out of five Americans age 65 and older being homeowners and more than seven in ten retirees having fully paid off their mortgages.
Additionally, the huge population of baby boomers is now moving towards retirement. In 2014 alone, approximately 4.2 million retirees moved into a new home. Of those surveyed, 37 percent of retirees had already moved since retirement, with 27 percent planning to do so.
Also of note, retirees are much more likely to believe their home’s emotional value is more important than its financial value.
So, what makes retirees pack up and relocate?
The top reason is wanting to be closer to their families, according to the survey. Other reasons include wanting lower home expenses, encountering health challenges, divorce or widowhood and empty nesting.
And what makes a retiree upsize instead of downsize?
According to respondents, retirees want to have a large enough home for family members to visit and stay with them. Many retirees are empty nesters and want to be able to host children and grandchildren during holidays or the summer.
Additionally, 16 percent choose to upgrade so that family members can live with them, such as adult children who move back home.
As for the other half, the 51 percent of retirees who downsized in their most recent move, they cite freedom from financial and maintenance burdens as the main reasons for downsizing.
However, those that downsize aren’t sitting idly by. With 47 percent of all spending on home renovations being spent by those 55 and older, most are renovating to make their homes more comfortable, attractive and versatile, according to the report.