Home in Retirement: More Freedom, New Choices

Transcription

Home in Retirement:
More Freedom, New Choices
A Merrill Lynch Retirement Study conducted
in partnership with Age Wave
Table of Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 3
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4
Home Free in Retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 5
Should I Stay or Should I Go? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9
Retirement HotSpots . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Refresh, Remodel, Renovate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 14
Health and Home in Later Retirement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 18
Preparing for Choices and Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 20
HOME IN RETIREMENT: MORE FREEDOM, NEW CHOICES
2
Introduction
Today’s retirees have more freedom and options when
choosing where and how they want to live in retirement.
With the possibilities presented by unprecedented longevity,
and often fewer work and family obligations than before
retirement, according to the study two-thirds (65%) of
retirees say they are living in the best home of their lives.
However, retirees today also face challenges, and must
consider how their needs may change throughout a 20-, 30-,
or even 40-year retirement.
Home in Retirement: More Freedom, New Choices reveals the
priorities, hopes, and worries of pre-retirees and retirees as
they envision the type of home, community, and geography
they wish to live in during their retirement years.
•
When people cross the “Freedom Threshold” and how
retirement can be a gateway to unprecedented freedom
when choosing where to live
During the next decade, age 65+ households will account for
nearly all household growth (FIG 1). This tremendous growth
among older households is driven by powerful demographic
forces:
•
The “Downsize Surprise,” and why many retirees don’t opt
for a smaller home
•
Today’s “Retirement HotSpots,” and where tomorrow’s
retirees want to live
•
The massive baby boomer generation is now moving into
their retirement years.
•
How retirees often choose not to move, but instead are
making their current home the best home of their lives
•
Increasing longevity leading to longer retirements.
•
The home and health challenges of later retirement and
how retirees are increasingly empowered to age in place
independently
How and where older adults choose to live will have
widespread implications for the different ways homes
might be designed, what resources will be needed, and
how communities nationwide should prepare for an aging
population.
The Study uncovers:
The following report summarizes the key findings of our Study.
Figure 1: Projected household growth by age: 2015-2025
12
10.7
Millions of households
10
8
6
4
2.5
2
0.9
0.1
0
-2
Under 35
35-44
-1.8
45-54
55-64
65+
Source: Joint Center for Housing Studies of Harvard, 2014
Figure 7: Percent of homeowners with no mortgage
Figure 9
Figure 8: Average home equity among homeowners, by age
$250,000
80%
72%
70%
$212,800
$194,900
$200,000
60%
50%
46%
$111,300
40%
30%
$140,900
$150,000
28%
$100,000
3
In a safe
A good pla
Methodology
This research study, completed in August 2014, was conducted in partnership with Age Wave and executed by
TNS via online data collection methodology. This survey was conducted among a total of 5,983 respondents.
Findings in this report are based on the analysis of 3,638 respondents age 21+, representative of the U.S. national
population across age, income, gender, and Census region, unless otherwise noted. The generational distribution
of the 3,638 is: 749 Silent Generation (age 69-89), 2,192 Boomers (age 50-68), 287 Generation Xers (age 38-49),
and 410 Millennials (age 21-37). An additional oversample of 2,345 affluent respondents age 50+ was conducted
for those with at least $250,000 in investable assets. Results from the affluent oversample are not included in this
report and will be released in future reports. Qualitative research was conducted via six focus groups among both
pre-retirees and retirees prior to the quantitative research.
About Merrill Lynch Global Wealth Management
Merrill Lynch Global Wealth Management is a leading provider of comprehensive wealth management and investment services
for individuals and businesses globally. With 14,085 Financial Advisors and $2 trillion in client balances as of December 31,
2014, it is among the largest businesses of its kind in the world. Merrill Lynch Global Wealth Management specializes in
goals-based wealth management, including planning for retirement, education, legacy, and other life goals through investment,
cash and credit management. Within Merrill Lynch Global Wealth Management, the Private Banking and Investment Group
focuses on the unique and personalized needs of wealthy individuals, families and their businesses. These clients are served by
more than 150 highly specialized Private Wealth Advisor teams, along with experts in areas such as investment management,
concentrated stock management and intergenerational wealth transfer strategies. Merrill Lynch Global Wealth Management is
part of Bank of America Corporation. For more information, please visit www.ml.com/retire.
About Age Wave
Age Wave is the nation’s foremost thought leader on population aging and its profound business, social, financial, health care,
workforce, and cultural implications. Under the leadership of Founder/CEO Dr. Ken Dychtwald, Age Wave has developed a unique
understanding of new generations of maturing consumers and workers and their expectations, attitudes, hopes, and fears
regarding retirement. Since its inception in 1986, the firm has provided breakthrough research, compelling presentations, awardwinning communications, education and training systems, and results-driven marketing and consulting initiatives to over half the
Fortune 500. For more information, please visit www.agewave.com. (Age Wave is not affiliated with Bank of America Corporation.)
Source: Bank of America. Merrill Lynch Global Wealth Management (MLGWM) represents multiple business areas within Bank of America’s wealth and investment management division
including Merrill Lynch Wealth Management (North America and International), Merrill Lynch Trust Company, and Private Banking & Investments Group. As of June 30, 2014, MLGWM entities
had approximately $2 trillion in client balances. Client Balances consists of the following assets of clients held in their MLGWM accounts: assets under management (AUM) of MLGWM entities, client brokerage assets, assets in custody of MLGWM entities, loan balances and deposits of MLGWM clients held at Bank of America, N.A. and affiliated banks.
4
0%
year
Age 45-54
25%
R
-5%
-4%
-10%
Home Free in Retirement
-12%
-15%
Under 35
35-44
45-54
55-64
65+
Bas
Source: Joint Center for Housing Studies of Harvard, 2015.
Sources: Joint Center for Housing Studies of Harvard, 2015; Age Wave calculations
Figu
Figure 28: Retirees’ top preference for receiving
long-term care
Figure 27: Type of neighbors people prefer, by age
Retirees are twice as likely as pre-retirees to say they’re free to live where they want, and two-thirds of retirees
75%
Nursing Home
Family Member
say they’re now living in the 67%
best home
of their lives.
1%
Home
67%
67%
65%
People of a similar age
and generation
53%
Retirement:55%
A Gateway
to Greater Freedom
People of diverse ages
47%
4%
Assisted
Living
Facility
10%
61%
and generations
Overwhelmingly,
45% retirees say they have unprecedented freedom to choose where they want to live, including freedom from many work
39%
Own Home
and family obligations that can dictate home choices, as well as greater freedom from home-related financial
worries and mortgage
33%
85%
33%
35%
33%
payments. As a result of this newfound
flexibility, the majority of retirees say they’re living in the best home of their lives.
25%
Greater Freedom
from Work and Family Obligations
15%
Under 35
35-44
45-54
55-64
65+
Age 50+ retirees
Base:most
Age 21+ of people’s lives, where they live is determined by their Base:
Throughout
responsibilities.
Most careers demand that people live
within a reasonable commuting distance from where they and/or their spouse work. Parents need homes that accommodate their
growing family and are close to their children’s schools. However, as people enter their 50s and 60s, they begin to cross what this
study reveals to be the “Freedom Threshold.” At age 61, the majority of people say they feel free to choose where they most want
to live (FIG 2).
Figure 2: Crossing the “Freedom Threshold”
Figure 16: Percent of retirees high
80%
70%
72%
72%
74%
69%
50%
70%
69%
Where I live is determined by life responsibilities,
such as family or work obligations
At this point in my life, I am free to choose
where I most want to live
20%
Pacific
South Central
Northeast
Age 61
Great Lakes
Heartland
44%
41%
28%
South Atlantic
56%
35%
30%
Mountain
64%
59%
40%
National
74%
65%
60%
28%
Source
31%
26%
0%
36%
10%
20%
Base: Age 50+ retirees; grade their climate/weather 80%+
31%
30%
26%
21-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74
75+
Base: Age 21+
Figure 18: Percent of pre-retirees who want to conti
region a³er retirement
Figure 15: Where do retirees give the highest grades to their geographic region?
AK
AK
Retirement Region Rankings
#1 South Atlantic
HI
HI
Where Pre-retirees
Want to Stay
WA
MT
ND
#6
ME
VT
5
WA
#1 South Atlantic
MT
OR
ND
(thousands)
500
2,000
1,500
0
2003
2004
2005
2006
2007 2008
2009
2010
2011 2012
Source: Centers for Medicare and Medicaid Services, 2013
As people empty nest and retire from full-time work, they are increasingly liberated from many of the family and work obligations
that have long restricted their choice of home and community (FIG 3). This newfound freedom to live how and where they want
500
peaks in retirement. Compared to pre-retirees, retirees are twice as likely to say they are free to choose where they want to live.
0
Conversely,
pre-retirees are twice as likely as retirees to say where they live is determined by life responsibilities (FIG 4).
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1,000
“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.”
FigureParticipant
3: Percent who place a high degree of importance on living…
– Focus Group
70%
63%
66%
64%
Near work
In a good school district
59% 58%
60%
Figure 3: Percent who place a high degree of importance
51% on living…
50%
%
%
70%
70%
40%
66%
64%
60%
30%
38%
59% 58%
27%
51%
50%
20%
40%
10%
30%
0%
19%
38%
Under 35
35-44
20%
Base: Age 21+
16%
6%
27%
45 -54
19%
10%
0%
Near work
In a good school district
55- 64
65+
16%
6%
Under 35
35-44
45 -54
55- 64
65+
Base: Age 21+
Figure 4: Percent who say where they live is determined by family or work obligations
80%
70%
70%
67%
60%
Figure 4: Percent who
say where they live is determined by family or work obligations
80%
70%
60%
50%
40%
30%
20%
50%
40%
70%
67%
30%
33%
30%
Pre-retirees
Retirees
20%
10%
0%
33%
30%
Pre-retirees
Where I live is determined by life At this point in my life,Retirees
I am free to
responsibilities, such as family or choose where I most want to live
work obligations
Base: Age 50+
10%
0%
Where I live is determined by life At this point in my life, I am free to
responsibilities, such as family or choose where I most want to live
work obligations
Base: Age 50+
6
Greater Freedom from Home-Related Financial
Worries
Figure 5: Percent who agree “homeownership is an
important part of the American Dream”
100%
Homeownership has long been a cornerstone of the
American Dream, and can create opportunities to build
equity and achieve greater financial security. Some may
assume that, due to the recent economic uncertainty, few
people – particularly younger generations – still aspire to
homeownership. However, the vast majority of people across
all generations say homeownership is a priority (FIG 5).
Not only are most
people
age 65+
homeowners,
few need
Figure
5: Percent
who agree
“homeownership
is anto
important
part
of
the
American
Dream”
worry about making mortgage payments. More than seven
100%
in ten have fullyFigure
paid 9:
off
their mortgages (FIG 7). For many,
Percent who say their home is… 89%
ers, by age
90%
86%
paying off their mortgage
before
retiring can be
an important
84%
Total population
81% 80%
80%
step toward achieving financial
peace of mind throughout Millennials
Gen X
79%
their retirement years. 70%Comfortable
Boomers
12,800
60%
Silent Gen
60%
62%
30%
20%
Base: Age 21+
Figure 1: Projected household growth by age: 2015-2025
12
Figure
6: Percent who are homeowners, by age
90%
40%
F
8
Figure
10: Percent of retirees who have 79%
moved 81%
80%
or anticipate
moving
in
retirement
6
69%
70%
62%
460%
2.5
250%
0.9
40%
27%
-2
20%
0.1
Do not anticipate moving
in retirement
36%
14%
Under 35
-1.8 Have moved in retirement
35-44
45-54
37%25-34
Under 25
35-44
55-64
65+
Have not yet moved, but
anticipate moving
45-54
55 -64
65+
Source: Bureau of Labor Statistics, 2013; noninstitutionalized population
39%
20%
10.7
10
48%
0%
65+
Boomers
Silent Gen
40%
0%
20%
In a place with pleasant
Base: Age 21+ climate/weather
Total population
Millennials
50%
10%
48%
89%
60%
30%
Retirees
Not retired
86%
Gen X
0
60%
40%
A good place to accommodate
30%family visits
81% 80%
70%
40%
75%
In a safe/secure
50% community
84%
80%
Millions of households
Nonetheless, affording a home can require many years of
savings, and homeownership is often a goal not achieved
until later in life. While a minority of young people own their
homes, four out of five Americans age 65+ are homeowners
(FIG 6).
90%
60%
80%
100%
B
Base: Age 50+ retirees
Base: Age 21+
Figure 7: Percent of homeowners with no mortgage
Figure 10: Percent of retirees who have moved
or anticipate moving in retirement
80%
Figure 11:
Reasons for moving in retirement
60% to be closer to family
Wanting
%
29%
50%
Figure 14: The main motivations for downsizing in retirement
ement
27%
33%
Retirees
Not retired
in retirement
36%
Wanting to lower monthly housing costs
Have moved in retirement
64%
anticipate moving
Maintaining a larger home is too much
37%
work
100%
44%
etirement
30%Change
17%
in health status 28%
Having fewer family members in the
household
18%
20%Change
in
18%status
marital
12%
10% Family is close by
7%
Empty nesting/children moving out
0%
45 -54
I love my community
18%
0%
Base: Age 50+ retirees who have moved since retiring
0%
20%
I can't afford to move
40%
60%
80%
Base: Age 50+ retirees who downsized in retirement
0%
48%
55 - 64 44% 65+
10%
42%
20%
30%
40%
31%
Friends are close by
16%
54%
l love my home
Wanting the cash from the sale
7%
Source: Bureau of Labor Statistics,
noninstitutionalized
population
of2013;
prior
home
Wanting the cash from selling a prior
home
40%
46%
26%their
Wanting
reduce
home expenses
Figure
20:toTop
reasons
why retirees would not leave
40%
current home
I don't want to lose independence
25-34
35 -44
%
72%
70%
28%
10% 20% 30% 40% 50% 60%
Base: Age 50+ retirees who don’t plan to move
Figure 12: Retirees’ most recent move was into a…
Figure 20: Top reasons why retirees would not leave their
current home
Figure 24: Percent of retirees who have renovated their
l love my home
54%
home by…
Family
is close
by
Creating
a home
office
Improving curb appeal
Upgrading to a nicer kitchen
48%
35%
34%
44%
32%
Figure 21: Which is more important to homeowners: their
home’s emotional or financial value?
70%
Same-Sized
The financial value of my home
Home
Figure 25: Median cost
of
renovation
Thehome
emotional
value of myproject
home by type
19%
65%
60%
Kitchen
55%
Roofing
50%
57%
52%
Larger Home
48%
30%
63%
Smaller Home
51%
$5,000
52%
48%
50% 50%
$4,600
56%
7
025
Moreover, the
equity
they have
built in their
during
Figure
7: Percent
of homeowners
withhomes
no mortgage
their lifetime can represent a substantial part of their overall
80%
net worth. On average,
home equity among homeowners
72%
age 65+ is more70%
than $200,000 (FIG 8). Age 65+ households
60%all U.S. households, but account for 40% of
represent 22% of
1
home equity. 50%
46%
Figure 8: Average home equity among homeowners, by age
$250,000
$212,800
$194,900
$200,000
$140,900
$150,000
$111,300
40%
$100,000
28%
30%
“When I was younger, I always worried about that monthly
18%
20%
mortgage payment.
Now
that18%
I am retired, I have the peace of
10%
mind of knowing I own my home free and clear.”
0%
– Focus Group Participant
25-34
35 -44
45 -54
55 - 64
65+
$50,000
$53,700
$0
Under 35
35 - 44
45 -54
55 - 64
65+
Source: Survey of Consumer Finances, 2013
+
12: Retirees’
recent
move
intoLife
a…
FreedomFigure
to
Live
in the most
Best
Home
ofwas
Your
Figure
8: Average
home equity
among
homeowners,
by age
Empowered with new options and opportunities, and with
$250,000
greater freedom from many home-related financial worries,
$212,800
Same-Sized
two-thirds (65%)
of retirees
say they are now
living in the
$194,900
$200,000
Home
19%
best home of their lives. Compared
to people who have
$140,900
Smaller
not yet retired,$150,000
retirees are more likely
to Home
say their homes
51%
$111,300
are comfortable, in a safe community,
and a great place to
Larger Home
$100,000
connect with family. They30%
also are more likely to say that
$53,700
they are now living
in
a
part
of the country with pleasant
$50,000
climate and weather (FIG 9).
Under 35
35 - 44
45 -54
55 - 64
65+
Figure 22: Percent of total home renovation expenditures by
age of head of household
Figure 13: The main motivations for upsizing in retirement
Under 35
9%
33%
People age 55+ spent
roughly $90 billion on
home renovations
last
20%
year
Age 55+
47%
19%
More room for additional family
members to live with me
Age 45-54
25%
More prestigious home
60%
Retirees
Not retired
19%
family visits
62%
48%
W
16%
More room for friends to visit
climate/weather
48%
39%
20%
20%
40%
60%
40%
80%
100%
Base:
Figure
home
Figure 23: Percent change in average spending on home
renovations by age, 2003-2013
30%
F
cu
Figure 14: The main motivations for downsizing in26%
retirement
25%
0%
20%
44%
Id
Renovat
Ins
18%
45-54
0%
40%
Inst
16%
20%
55-64
65+
Base: Age 5
40%
60%
80%
75%
HOMEFigure
IN RETIREMENT:
MORE
FREEDOM,
NEW CHOICES
23: Percent
change
in average
spending
renovations
by age, 2003-2013
65%
Adding
as
Modifyi
4%
3%
5% a larger home is too much
Maintaining
work
0%
-12%
Base: Age 50+ retirees who upsized in retirement
67%
64%
10%
-15%
Under
35-44
Wanting the
cash 35
from selling
a prior
home
16%
15%
Wanting
to lower monthly housing costs
-5%
Having fewer family members
in the
-4%
household
-10%
19%
67%
67%
on home
61%
53%
Ma
20%
75%
20%
More
for family members to visit
Ageroom
35-44
30%
55%
More room for additional family
In a safe/secure community
0%
Wa
33%
79%
60%
Base: Age 21+
by
More room for family members to visit
Comfortable
0%
$0
Fig
Figure 9: Percent who say their home is…
and generation
26%
Ba
Figure 2
Figure 28: Retirees’ top preference for receiving
long-term care
Nursing
Home their
Family Member
Figure 24: Percent
of retirees who have
renovated
1%
Home
home by…
4%
Assisted
Living
Facility
Creating a home office
35%
8
1.
Fig
2.
3.
Millio
2.5
2
0.9
0.1
0
Should I Stay or Should I Go?
-2
Under 35
-1.8
35-44
45-54
55-64
65+
Figure
7: Percent
of homeowners
withhalf
no mortgage
Two-thirds of retirees are likely to move at least once during retirement.
When
retirees
move, only
downsize,
Figure 6: Percent who are80%
homeowners, by age
and
many
move
homes. is an
Figure
5: Percent
whointo
agreelarger
“homeownership
important part of the American Dream”
Retirees90%on the84%
Move
81% 80%
86%
89%
60%
The “Downsize Surprise”
80%
Total population
Millennials
With new80%
freedom to decide where they want
to live, many
Gen X
70%
retirees make
the decision to move to a different
Boomers home,
Silent Gen
community,
60% or part of the country. An estimated 4.2 million
retirees moved
into a new home last year alone.2
50%
Sixty-four40%percent of retirees say they are likely to move at
least once
30%during retirement, with 37% having already done
so and 27%
anticipating doing so (FIG 10).
20%
Base: Age 21+ other things, wanting to lower home expenses,
Among
encountering health challenges, divorce or widowhood, and
Figurenesting
6: Percent
who
age in retirement.
empty
can
allare
be homeowners,
triggers for by
moving
However, retirees cite “wanting to be closer to family” as a
90%
81%
top reason for moving (FIG 11).
79%
72%
70%
90%
100%
69%
50%
70%
81%
79%
46%
62% that once they retire, they will downsize
Many people assume
60%
40%
their home. Their children have moved out, they need less
50%
28%
space, they
don’t30%want the maintenance
hassles of a larger
40%
40%
18%
20%
18%
home, and moving to a smaller home might free up cash. In
30%
10%
fact, many pre-retirees
assume they will downsize to help
20%
14%
pay
for
their
retirement.
0%
10%
25-34
35 -44
45 -54
55 - 64
65+
However,
pre-retirees
who
expect
to65+downsize when they
Under 25 25-34
35-44
45-54
55 -64
may2013;
benoninstitutionalized
surprisedpopulation
to learn that half (49%) of retirees
Source: Bureauretire
of Labor Statistics,
didn’t downsize in their last move. In fact, three in ten
upsized into a larger home (FIG 12).
0%
80%
69%
Figure 11: ReasonsFigure
for moving
in retirement
12: Retirees’
most recent move was into a…
70%
Figure 10:
Percent of retirees
who have moved
62%
60%
or anticipate
moving in retirement
50%
Wanting to reduce home expenses
30%
27%14%
in retirement
20%
36%
10%
0%
Under 25
25-34
29%
Wanting to be closer to family
40%
40%
Change in health status
35-44
Change in marital status
Have
45-54
not
55 yet
-64 moved,
65+ but
anticipate moving
37%
Same-Sized
26%
Home
19%
17%
Smaller Home
51%
12%
Larger Home
30%
7%
of prior home
7%
0%
10%
20%
30%
40%
Base: Age 50+ retirees who have Base:
movedAge
since
50+retiring
retirees who have moved since retiring
Figure 11: Reasons for moving in retirement
29%
Figure 21: Which is more important to homeowners: their
26%
Wanting to reduce home expenses
Change
in health
Figure 20: Top
reasons
whystatus
retirees would not17%
leave their
current home
7%
65%
48%
Family is close by
of prior home
10%
55%
44%
20%
42%
I love my community
Age 35-44
19%
57%
60%
7%
0%
9% value of my home
The financial
The emotional value of my home
70%
54%
l love my home
Under 35
12%
30%
40%
50%
48%
45%
28% CHOICES
HOME IN RETIREMENT: MORE FREEDOM, NEW
0%
10% 20% 30% 40% 50% 60%
48%
50% 50%
Age 45-54
25%
44%
43%
40%
31%
Friends are close by
52%
52%
63%
Age 55+
56% roughly $90 billion on
47%
home renovations last
year
37%
35%
30%
25%
Under 35
Base: Age 21+ homeowners
35-44
45-54
55-64
65-74
75+
9
65+
tgage
2%
5+
…
From Empty
Nest
Welcome
Home
Figure
12: to
Retirees’
most recent
move was into a…
Retirees say a top reason to upsize is to have a home that
is large and comfortable enough for family members to
visit and stay with them (FIG
13). Many retirees have empty
Same-Sized
Home
nested, and their adult
grandchildren, and other
Figurechildren,
8: Average
19% home equity among homeowners, by age
family members may live in disparate Smaller
parts of
the country.
Home
$250,000
Thus, retirees often find
their homes become
51% places for
family to come together Larger
and reconnect,
particularly during $212,800
Home
$194,900
$200,000
30%
holidays or summer vacations.
$140,900 members
$150,000
Many retirees also say
they upsize so that family
$111,300
can live with them, if needed. According
to this study, one
$100,000
Age 50+ retirees
who a
have
moved since retiring
in six (16%) Base:
retirees
has
“boomerang”
adult child who has
moved back in. In fact, due in$53,700
part to adult children returning
$50,000
to their parents’ home, the number of multigenerational
family households doubled
$0 between 1980 and 2010, from
Under 35
35 - 44
45 -54
55 - 64
65+
11% to 22%.3
Figure
who
More
room9:
forPercent
additional family
say their home
is…
20%
79%
19%
More prestigious
home
Comfortable
60%
16%
More
room for friends
to visit
In a safe/secure
community
0%
75%
60%
20%
family visits
40%
62%
Retirees
Not retired
48%
48%
climate/weather
39%
0%
20%
40%
60%
80%
100%
Base: Age 21+
33%
More room for family members to visit
Fig
ho
Figure 23: Percent change in average spending on home
“After our kids left home, we got an even bigger house. We have kids and grandkids
all over the country and wanted space
30%
26%
for them to visit.”
25%
Under 35
9%
20%
Age 35-44
19%
15%
Age 55+
downsized year
in their last move
The half (51%) of retirees who
Age 45-54
More
roomfinancial
for family members
visit
cite freedom from
the
andtomaintenance
burdens of33%
25%
a larger home as the top reasons to downsize (FIG 14). By
Morereleasing
room for additional
family tied up in a larger
reducing expenses and
equity
20%
Sources: Joint Center
of Harvard,
2015; Age Wave calculations
home, downsizing
canfor Housing
helpStudies
make
retirement
more financially
secure.
19%
0%
20%
40%
Finding a Retirement Community That Matches Your
Interests 75%
67%
67%
3%
5%
0%
-5%
-4%
-10%
-15%
-12%
Under 35
35-44
45-54
0%
55-64
64%
-4%
-10%
-12%
-15%
Under 35
35-44
work45-54
55-64 44% 65+
Having fewer family members in the
household
18%
16%
0%
20%
40%
Figure 28: Retirees’ top preference
for receiving
Base: Agecare
50+ retirees who downsized in retirement
long-term
Family Member
Home
4%
60%
80%
Figu
Nursing Home
1%
home by…
Own Home
85%
35%
34%
32%
29%
Upgrading to a nicer bathroom
Base: Age
50+ retirees
Adding
safety features in the bathroom, such
as handrails/grab bars or walk-in shower
Modifying my living situation so I could live on
one floor if I had trouble with stairs
Renovating to make it easier to get around my
home if my health worsens
Installing a ramp, li³, or elevator to avoid
climbing steps
Installing lower counters or cabinets in the
kitchen for easier access
0%
65+
Sources
28%
15%
9%
7%
5%
10%
20%
30%
40%
Base: Age 50+ retiree homeowners who plan to stay in their home throughout retirement
Figure 2: Crossing the “Freedom Threshold”
Figure 16: Percent of retirees
highly
10
80%
Figure 28: Retirees’ top72%
preference for receiving
Base
Assisted
Living
Facility
10%
Mo
Re
-5%
Wanting
to lower monthly housing costs
67%
According to65%
this study, just
61%7% of retirees have moved
into age-restricted
retirement communities. However,
there
and generation
53%
55%
is growing diversity
of
retirement
communities
designed
People
of
diverse ages
47%
and generations
45%
Figure
23:and
Percent
change inofaverage
spending on home
to
meet
the
needs
aspirations
new
generations
of
ditures by
renovations
by39%
age, 2003-2013
retirees. Today,
approximately
100
retirement
communities
33%
33%
35%
33%
4
30%
have ties to universities,
affording opportunities for 26%
25%25% and connections with both students and
continued learning
20%
alumni. Other15%retirement
communities have been created
15%Under 35
35-44
45-54
55-64
around niche interests
and
affinities,
such
as65+
religion and
Base: Age 21+
10%
spent
spirituality, art and theater, and hobbies.
ion on
4%
ns last
Figure
14: The main motivations
for downsizing
in retirement
4%
5%
3%
Wanting the cash from selling a prior
home
16%
A
10%
13: The main 47%
motivationsroughly
for upsizing
in retirement
$90 billion
on
The Upsides Figure
to Downsizing
Figure 29: Aging-ready home features
74%
National
Retirement HotSpots
The South Atlantic, Mountain, and Pacific regions top the list of Retirement HotSpots.
Following Your Own Compass in Retirement
Retirement can present new opportunities to live anywhere in America. For some people, it can even mean living in another part of the
world – roughly 373,000 retired Americans lived abroad in 2013.5 Among people age 65+ who moved last year, most (83%) chose to
remain in the same state. However, over one out of six (17%) people age 65+ who moved last year relocated to a different state or
part of the country.6
Top Retirement HotSpots
When asked to grade how well their geographic location fits their priorities and lifestyle, retirees in the South Atlantic, Mountain,
and Pacific gave their regions the highest marks (FIG 15). Not surprisingly, retirees in these three regions are happiest with their
climate and weather (FIG 16). Retirees in the Mountain and South Atlantic regions are also among the most satisfied with their cost
of living (FIG 17).
11
Figure 25: Median cost of home renovation project by type
1. No-step entry
Kitchen
80%
$5,000
Roofing
$4,600
Plumbing, electrical, etc.
$3,600
Figure
70%
Bedroom(s)
controls
4. Accessible electrical
$2,500
40%
$2,400
on doors and faucets
5. Lever-style handles
30%
WA
$2,000
MT
safety
features
6. Bathroom
ND
$1,200
OR
#3
#6
MN
Flooring, paneling, & ceiling
ID
NY
WI
MI
countertops and cabinets
7. Accessible
WY
#5 IA
$1,200
#7
#2
NE
Doors and windows
#3 Pacific
0%
$3,000
Patio, terrace, or deck
#2 Mountain
50%
HI
Own Home
Bathroom
85%
#1 South Atlantic
60%
3. Extra-wide hallways and doors
AK
NV
SD
UT
CO
Sources: Joint Center for Housing Studies KS
of Harvard, MO
AARP
#4 South Central
Source: U.S. Census Bureau, HomeCAImprovements. May 2013.
#5 Heartland
IL
PA
MD
WV
VA
KY
OK
NM
AZ
#7 Great Lakes
MS
AL
GA
TX
1,402
AK
1,396
1,392
HI
1,386
1,388
WA
1,376
MT
1,366
OR
ND
MN
ID
WI
SD
68%
Under 35
Base: Age 21+
1,406
1,35677%
0%#3 Mountain
55%
WY
50%
IA
1,346
NE
45-54 2003 NV
55-64 2005 2006
65+ 2007 2008 2009 2010 IL2011
2004
UT
35-44
#3 South CentralSource: Centers for Medicare
CA
and Medicaid Services, 2013
CO
#5 Heartland
KS
MO
OK
NM
AZ
#6 Great Lakes
#1
LA
Where Pre-retirees
Want to Stay
#2 Pacific
NJ
DE
DC
1,412
1,416
10%
SC
AR
#4
74%
55%
1,426
55%
50%
#1 South Atlantic
NC
TN
#6 Northeast
20%
ME
VT
NH
MA
RI
CT
OH
IN
1,455
1,446
18: Percent of pre-retirees who
want to continue living in e
1,439
1,435
60%
region a³er retirement 1,436
1,426
Single-floor
living
Figure 15: Where do retirees give the2.highest
grades
to their geographic region?
Recreation rooms
1,446
(thousands)
% Nursing Home
1%
%
and community, by age
AR
68%
#7 Northeast
TX
MS
LA
FL
Figure 31: Number of home health care recipients, 2003-2012
Figure 30: Number of nursing home residents, 2003-2012
Base: Age 50+ pre-retirees
Base: Age 50+ retirees; grade their geographic region 80%+
1,455
1,446
1,446
1,436
3,500
1,439
3,000
1,435
Figure 16: Percent of retirees highly satisfied
1,426 with their climate/weather
2,500
1,426
(thousands)
National
Mountain
1,402
1,406
1,392
1,396
1,386
48%
1,388
70%
1,383
1,376
South Atlantic
1,356
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
South Central
Great Lakes
South Central
1,000
Mountain
500
South Atlantic
0
2003
58%
2004
2005
10%
20%
30%
40%
50%
60%
70%
35%
Northeast
35%
70%
Mountain
58%
50%
South Atlantic
58%
40%
18: Percent of pre-retirees
Heartland who want to continue living in each
a³er retirement
Great Lakes
HI
acific
77%
eartland
reat Lakes
ortheast
0+ pre-retirees
20%
55%
NV
UT
CA
NE
IA
IL
CO
KS
OH
IN
MO
OK
NM
68%
MD
WV
VA
KY
NC
TX
SC
AR
MS
LA
RI
CT
PA
TN
AZ
MA
MI
50%
AL
GA
Near
In a g
59% 58%
51%
38%
19%
10%
Where Pre-retirees
Want to Move
NY
WI
SD
68%
40%
AK
40% 49% 50%
VT
NH
MN
ID
30%
20%
ME
30%
ND
WYaffordable cost of living 80%+
Base: Age 50+ retirees; grade area they live for
outh Central
42%
35%
Northeast
OR
20%
Figure 19: Percent of pre-retirees
all
30%who want to move to each region, among27%
pre-retirees who want to move to a different region in retirement
35%
Pacific
AK
Mountain
51%
66%
64%
60%
63%
South Central
MT
10%
10%
Figure 3: Percent who place a high degree of importance on living
46%
0%
2011 2012
Base: Age 50+ retirees; grade area they live for affordable cost of living 80%+
National
WA
2010
42%
0%
Figure 17: Percent of retirees highly satisfied with their cost of living
outh Atlantic
2009
Pacific
80%
Where Pre-retirees
Want to Stay
2007 2008
Great Lakes
29%
0%
2006
Heartland
32%
Heartland
3,434 3,464 3,460
Figure 17: Percent of retirees highly satisfied with their cos
38%
Northeast
3,281
National
1,500
67%
1,346
2,976
2,836
2,000
68%
1,366
Pacific
(thousands)
1,412
1,416
2,681
3,172
3,026 3,100
80%
NJ
DE
DC
0%
WA
South Atlantic
60% #1 70%
#2 Mountain
HI
Base: Age 21+
16%
OR
UnderMT35
ID
NV
#4 South Central
#5 Northeast
#6 Heartland
#6 Great Lakes
FL
ME
45 -54
55- 64
4%
VT
MN
UT
CA
NY
WI
SD
25%
#3 Pacific
35-44
ND
2%
WY
NE
MI
2%
IA
IL
CO
KS
OH
IN
MO
OK
NM
12%
MD
WV
VA
KY
TX
NJ
DE
DC
NC
SC
AR
MS
LA
RI
CT
PA
TN
AZ
NH
MA
AL
GA
39%
FL
12
Figure 4: Percent who say where they live is determined by family or work o
0%
10%1,346 20%
30%
40%
50%
60%
70%
80%
0%
0
2003
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2004
2005
10%
2006
20%
2007 2008
2009
201
Base: for
AgeMedicare
50+ retirees;
grade area
they live2013
for affordable cost of living 80%
Source: Centers
and Medicaid
Services,
31%
Where Tomorrow’s Retirees Want to Live
6%
A portrait of where pre-retirees want to live in retirement provides a glimpse into how America may be reshaped in the coming
years. Most pre-retirees (60%) anticipate staying in the same state or region, while four in ten see retirement as a chance to try
living in a new part of the country. To a large degree, where pre-retirees say they want to stay or move to in retirement mirrors
where today’s retirees say they are happiest. For instance, roughly four in five pre-retirees living in both the South Atlantic (80%)
and Pacific (77%) regions say they want to continue living there in retirement (FIG 18).
75+
e/weather
Figure 3: Percent who place a high deg
Figure 18: Percent of pre-retirees who want to continue living in each
Figure 19: Percent of pre-retirees who want to move to each region,
70% region in retirement
pre-retirees who want to move to a different
66%
64%
National
46%
HI
68%
Where Pre-retirees
Want to Stay
67% #1 South Atlantic
E
RI
T
#2 Pacific
58%
WA
South Atlantic MT
77%
ID
Heartland
Pacific
AZ
#6 Great Lakes
50%
IA
KS
OH
IN
MO
OK
NM
WV
VA
NC
SC
AR
68%
MS
GA
AL
LA
TX
10%
20%
NJ
DE
DC
MD
KY
80%
30%
#2 Mountain
42%
OR
NV
#4 South Central
50%
60%
MN
UT
WI
SD
30%WY
CA
2%
NE
MI
2%
IA
IL
20%
CO
KS
IN
MO
K
TN
AZ
#6 Great Lakes
40%
ND
25%
#3 Pacific
#6 Heartland
35%
50%
40%MT
ID
#5 Northeast
35%
FL
WA
16%
51%
RI
CT
PA
TN
0%
80%
MI
IL
CO
Northeast
#7 Northeast
70%
NE
UT
Great Lakes
#5 Heartland
60%
55%
WY
VT
NH
MA
NY
WI
SD
NV
CA
HI
58% Atlantic
#1 South
ME
49%
ND
MN
68%
#3 Mountain
#3 South Central
OR
AK
Where
58%Pre-retirees
Want to Move
Mountain
59% 58%
60%
63%
South
Central
AK
70%
OK
10%NM
0%
70%
AR
12%
TX
Under 35
MS
AL
LA
35-44
Base: Age 21+
Among pre-retirees who want to move to a different region in retirement, the South Atlantic region is the clear winner – with four
in ten (39%) saying they would most want to move to that region – followed by the Mountain (25%) and Pacific (16%) regions
(FIG 19).
Figure 4: Percent who say where they live is dete
80%
Figure 19: Percent of pre-retirees who want to move to each region, among all
pre-retirees who want to move to a different region in retirement
70%
70%
60%
AK
50%
HI
Where Pre-retirees
Want to Move
ME
NH
MA
NJ
DE
RI
CT
WA
#1 South Atlantic
#2 Mountain
MT
16%
#5 Northeast
#6 Heartland
ID
NV
4%
ND
MN
UT
CA
NY
WI
SD
25%
#3 Pacific
#4 South Central
OR
2%
WY
NE
MI
2%
IA
IL
CO
KS
MO
MD
WV
VA
KY
OK
NM
#6 Great Lakes
12%
TX
3
10%
SC
AR
MS
LA
33%
20%
NJ
DE
DC
NC
TN
AZ
30%
RI
CT
PA
OH
IN
40%
ME
VT
NH
MA
AL
GA
0%
39%
Where I live is determined by life At this po
responsibilities, such as family or choose w
work obligations
FL
Base: Age 50+
13
75%
In a safe/secure
community
70%
60%
Gen X
60%
Boomers
Silent Gen
Retirees
60%
Not retired
40%
Refresh, Remodel, Renovate
62%
50%
family visits
20%
40%
48%
30% climate/weather
39%
0%
65+
20%
40%
40%
anticipate moving
14%
37%
10%
0%
20%
in retirement
36%
30%
48%
60%
80%
Under 25
100%
25-34
35-44
45-54
55 -64
65+
Base: Age 21+
Base: Age 21+
Most retirees say their home’s emotional value is even more important than its financial value. Many never move
but instead make their current home even better.
Figure 10: Percent of retirees who have moved
or anticipate moving in retirement
Home
Is Where
thefor
Heart
Is in retirement
Figure 14:
The main
motivations
downsizing
irement In Retirement,
While roughly two-thirds of retirees are likely to move at
least once in
retirement,
the
other
Wanting
to lower monthly
housing
costs one-third anticipates
64%
33%
Do not anticipate
moving
27%
staying where they are
throughout their retirement
years.
The
in retirement
36% the deep emotional
Retirees reasons many retirees don’t move reveal
44%
Not retired
work
connection they have with their home. Retirees
who
don’t
plan
Have
not yet
moved,
but
anticipate moving
to move cite,Having
“I love
my
home”
as
a
top
reason
for
remaining
fewer family members in the
18%
household
where they are (FIG 20). 37%
40%
erement
People’s homes
can
befrom
both
a afinancial
asset
and also an
Wanting
the cash
selling
prior
16%
home
important emotional
asset
–
representing
memories
with
0% Prior
20% to40%
80%
family and treasured life experiences.
age 60%
55, more
homeowners say the financial value of their home outweighs
its emotional value. As people age, however, they are far
more likely to say their home’s emotional value is more
important than its financial value (FIG 21).
20: Topwe
reasons
whyour
retirees
would
not leave
their
“Our home
isFigure
everything
put into
house
materially
and
home
by…
emotionally current
over thehome
years. It’s us.”
35%
l love my home
54%
Adding safety features in the bathroom, such
Modifying my living Isituation
so I could live on
love my community
home
if my
worsens
Friends
arehealth
close by
climbing steps
Installing lowerIcounters
or cabinets
can't afford
to move in the
Empty nesting/children
moving out
I love my community
7%
Friends are
of close
priorbyhome
7%
0%
0%
Roofing
$4,600
60%
57%
52%
52%
50% 50%
Recreation rooms
50%
48%
48%
45%Bedroom(s)
43%
40%Bathroom
$2,400
35%Patio, terrace, or deck
$2,000
30%Flooring, paneling, & ceiling
$1,200
55%
Under 35
$3,000
Bedroom(s)
$2,500
4. Accessible electrical controls
handles on doors and faucets
5. Lever-style
Bathroom
Patio,safety
terrace, features
or deck
6. Bathroom
HOME IN RETIREMENT: MORE
FREEDOM, NEW CHOICES
7. Accessible countertops and cabinets
Doors and windows
%
Sources: Joint Center for Housing Studies of Harvard, AARP
Source: U.S. Census Bureau, Home Improvements. May 2013.
$2,400
$2,000
45-54
55-64
56%
$3,600
$3,000
$2,500
44%
37%
$1,200
65-74
75+
Figure
nursing
home residents,
Figure30:
26:Number
Percentof
who
feel connected
to their2003-2012
neighbors
80%
1,446
1,455
1,446
70%
1,436
$4,600
Recreation rooms
35-44
63%
$5,000
$3,600
40%
10% 20% 30% 40% 50% 60%
The financial value of my home
$5,000
The emotional value of my home
65%
25%Doors and windows
30%
Kitchen
70%
0% 20%
10%30% 20%
30% 60% 40%
10%
40% 50%
Roofing living
2. Single-floor
20%
28%
Figure
Whichcost
is more
important
to homeowners:
their
Figure
25:21:
Median
of home
renovation
project by type
28%
1. No-step
entry
Kitchen
31%
31%
Figure 29: Aging-ready home features
Figure 25: Median cost of home renovation project by type
44%
42%
10%
can't
move
Base: Age 50+ retirees Iwho
haveafford
movedto
since
retiring
28%
Base: AgeBase:
50+ Age
retiree
plan
to to
stay
in their home throughout retirement
50+homeowners
retirees whowho
don’t
plan
move
12%
15% 42%
7%
17% 48%
44%
5%
54%
Change
in health status
Family is close by
29%
9%
26%
Wanting to reducel home
expenses
love my home
48%32%
Familyto
is aclose
Upgrading
nicerbykitchen
0%
Figure 20: Top reasons why retirees would not leave their
29%
current home
34%
%
Figure 11: Reasons for moving in retirement
1,426
60%
1,416
(thousands)
100%
%
27%
50%
50%
50%
1,439
74%
1,435
55%
1,426
55%
60%
1,412
1,402
1,406
40%
1,396
1,392
1,386
30%
1,388
1,383
1,376
20%
1,366
$1,200
10%
1,356
$1,200
1,346
0%
14
2003
2004
2006 2007 45-54
2008 2009 55-64
2010 2011 2012
Under
35 200535-44
65+
Base: Age 21+
$250,000
Figure 14: T
Figuremotivations
14: The main
for79%
downsizing in retirement
formotivations
upsizing in retirement
Themove
main motivations for upsizing79%
in retirementFigure 13: The main
Figure 12: Retirees’Figure
most 13:
recent
Comfortable
Comfortablewas into a…
$212,800
to a…
$212,800
60%
60%
$194,900
$200,000
75%
75%
A Chance to Create
Your
Dream
Home
“Weroom
always
had
plans
to make
our
home better.
that
we’re Wanting to lowe
Wanting
to lower
monthly
housing
costs
More
family
members
to visit
33%
More
room for family
members
to visit
64%
Do
notNow
anticipate
moving
33%
In for
a safe/secure
community
In
a safe/secure
community
27%
60%
$140,900
in retirement
60%
$150,000
and savings toRetirees
do just that.”
Retirees may love
their home – but that doesn’t mean
Same-Sized
36%
Retirees retired, we have the time, flexibility,
$111,300
Home
Not retired
Maintaining a l
Not retired – Focus
Maintaining
a larger home is too much
Group
Participant
they’re not interested
in
making
it
even
better.
People
in
More
room
for
additional
family
More
room
for
additional
family
62%
62% 20%
A19%
good place to accommodate
work 20%
Have not44%
yet moved, but
$100,000
members to live
with
me
members
to live with me
family
visits
family visits
48%
48%time, and
anticipate moving
later life and retirement often
have
more
flexibility,
Smaller Home
$53,700
37%
financial resources
to improve their
Having fewe
51% homes. In fact, age 55+
Having fewer family
members in the 48%
$50,000
While some
modified
to19%
make18%
it more age48%
In
a place
with pleasant
More
prestigious
home their home
In a place with
Morepleasant
prestigious home
household
19%
climate/weather
climate/weather
39%
households account
for nearly
half (47%) of all39%
spending
Larger Home
friendly, most retirees have renovated their homes to make
30% – about $90 billion annually (FIG 22).
$0
on home renovations
0%
80%
Wanting the cash
from20%
selling
a40%
prior 60%
0%
20%
60%
80% 100%
themMore
more
attractive,
more
comfortable,
and100%
more versatile Wanting the c
Under 35
35 - 44
45 -54
55 - 6440%
65+
16%
16%
room for friends to visit
home
16%
Base: A
Moreover,
while younger
slowed or reduced
Age 21+ Base: Age 50+ retirees
Base: Finances,
Age 21+ households
Source: Survey of Consumer
2013
(FIGBase:
24).
A typical renovation or remodeling project can cost
0%
20%
40%
60%
80%
spending on home renovations between 2003
and 2013,
0% and budgeting
20%
40%
0%
20%
40%
several thousand dollars,
for home
renovations
Base: Age 50+ retire
Age
retirees who downsized in retirement
Base: Age 50+ retirees who Base:
upsized
in 50+
retirement
spending
among those
age
increased
by 26% (FIG 23).
Base: Age 50+
retirees65+
who upsized
in retirement
can be an important part of retirement planning (FIG 25).
65+
Figure
Figure
20:
Top
reasons
why who
retirees
not leave
Figure 24:
Perc
Figure
14: The
main
downsizing
in would
retirement
Figure
24:motivations
Percent
of for
retirees
have
renovated
theirtheir
Figure
14:23:
The
main motivations
for downsizing
in retirement
Figure 13:
The main
motivations
for upsizing
in retirement
etirement
Figure
23: Percent
change
in
average
spending
on home
Figure
Percent
change
in average
spending
22: Percent
of total
home renovation
expenditures
by on home
penditures Figure
by
curren
current
home
home
by…
home
by…
renovations by age,
2003-2013
renovations
by
age,
2003-2013
30%
Wanting
to lower
monthly
housing costs
More room
for family
members
to visit
Under 35 25%
9%
20%
a larger home
MoreMaintaining
room for additional
familyis too much
work
15%
members
to live with me
$903%
billion
18% on 4%
19%
year
10%Age 55+
0%
16%
16%
-10%
-12%
-15%
40%
0%
0%
20%
20%
35
35-44
Base: Age
retirees
who downsized
in retirement
who50+
upsized
in Under
retirement
40%
45-54
60%
40%
80%
55-64
65+
65%
20%
61% Upgrading to a nicer kitchen
Assisted
Living
ple of a similar age
15%
generation
53%
Facility
55%
10%features in the bathroom, such
10%47% Adding safety
ple of diverse ages
generations
as handrails/grab bars or walk-in shower and generations
4%
Modifying my living situation so3%
I could live on
15%
39% one floor if I had trouble with stairs
Own Home
Renovating to make it easier
to
get
around
my
9%
33%
85%
33%home if33%
my health worsens
7%
-4%
climbing steps
5%
-12%
45% 5%
35%
0%
-5%
25%-10%
-15%
15%
+
and generation
Under 35
Under 35
35-44
35-44
45-54
45-54
55-64
65+
0%
55-64
10% 65+
20%
Base:
50+ Studies
retiree homeowners
who plan to stay in their home throughout retirement
Source: Joint Center
for Age
Housing
of Harvard, 2015.
Base: Age 21+
Nursing Home
Family Member
Kitchen
1. No-step
entry 1%
curb appeal
HomeImproving
4%
Roofing
34%
32%
igure 2:
Assisted
Crossing
the
Living
Facility
80%10%
Doors and windows
0%
40%
1. No-step entry
1,446
1,455
1,446
1,436
3. Extra-wid
$3,000
10%
20%
30%
4. Accessib
5. Lever-sty
6. Bathroom
7. Accessib
$1,200
40%
Source:
C
Sources: Joint Center
forU.S.
Hous
1,439
Figure 3
1,4
1,435
1,4
2. Single-floor
1,42616: Percent of retirees highly satisfied
Figure
w
Figu
highlyliving
satisfied
with their climate/weather
1,4
1,426
3. Extra-wide hallways
1,416 and doors
National
74% NEW CHOICES
72%FREEDOM,
74%
on
doors and
faucets
85%
69%
72%
2. Single-flo
$3,600
Figure 29: Aging-ready
features
Figure home
30: Number
of nursing home residents, 2003-2012
70%
70%
29%
1. No-step
$4,600
Source:
U.S.
Census
Improvements.
May 2013.
Sources:
Joint
Center
for Bureau,
HousingHome
Studies
of Harvard, AARP
Nursing Home
1%
“Freedom
Threshold”
2. Single-floor
living
32%
$5,000
28%
Bedroom(s)
$2,500
4.soAccessible
Modifying my living situation
I could
live onelectrical controls
15%
one floor if I had trouble with stairsOwn Home
Bathroom
Renovating to make it easier5.toLever-style
get around my handles on doors and faucets$2,400
9%
home if my health worsens 85%
Patio,
terrace, or deck
$2,000
Installing a ramp, li³, or elevator
to avoid
7%
6. Bathroom
climbing stepssafety features
$1,200
5%
7.forAccessible
kitchen
easier accesscountertops and cabinets
28%
29: top
Aging-ready
home
features
Figure 28:Figure
Retirees’
preference
for receiving
long-term care
Family Member
1. No-step entry
Home
4%
34%
Assisted
Upgrading2.
to Single-floor
a nicer kitchen living
Living
Facility
3. Extra-wide
hallways and doors
Recreation
10%
Adding safety features in the bathroom,
such rooms
29%
30%
Base: Age 50+ retiree home
35%
35%
Nursing
26% Home
1%
Family Member
67%
67%
67%
Home
Improving
curb appeal
4%
25%
I don't
w
Upgr
Figure 24: Percent
of retirees
who have
renovated
their
Figure 29:
Aging2
Figure
Aging-ready
home
features
Figure
Figure 28: Retirees’
top29:
preference
receiving
Figure
25:
Medianfor
cost
of home
renovation project by type
home by…
long-term care
24:change
Percent
retirees
who have
their
Figure 23:Figure
Percent
inof
average
spending
onrenovated
home
Figure
28: Retirees’
preference
Figure
27: Type
of
neighbors
peopletop
prefer,
by agefor receiving
home
by…
renovations
bylong-term
age,
2003-2013
care
75%30%
Up
29%
Base:
Age 50+
retiree homeowners
who plan to stay in their home throughout retirement
Source: Joint Center for Housing
Studies
of Harvard,
2015.
Source:
Joint Center
for Housing
Studies
Harvard, 2015.
Sources: Joint Center for Housing
Studies
of Harvard,
2015; Age
Waveofcalculations
%
44%
34%
32%
Adding safety featu
Adding safety features in the bathroom, such
10%
28%
as handrails/gr
Having fewer family members in
the my community4%
I love
42%
Modifying my living
5%
3% so I18%
Modifying my
living situation
could live on
household
15%
one floor
0%
Renovating to make
Renovating to make
it easier
to get
Friends
are close
byaround my
31%
9%
h
home if my health worsens
Wanting the cash from
selling aa prior
-5%
Installing a ram
Installing
ramp, li³, or elevator
16% to avoid
7%
-4% home
climbing steps
28%
-10%
Installing lower
5%
kitchen
for
easier access
0%
20%
40%
60%
80%
-12%
-15%
0% 10% 20% 30% 40% 50% 60%
0% 65+10%
20%
30%
40%
35 who downsized
35-44 in retirement
45-54
55-64
Base: Age Under
50+ retirees
Base: Age 5
Having fewer 47%
family members roughly
in the
5%
More prestigious
home household
Age 45-54
Wanting
the cash from selling a prior
-5%
home
-4%
25%
me
ge
%
44%
48%
Own Home
69%
6. Bathroom safety features
70%
Mountain
South Atlantic
1,406
74%
1,396
1,412
48%
1,386on doors and faucets
safety1,366
features
6. Bathroom 69%
1,376
1,4
1,402
National
1,392
1,388
Mountain 70%
South Atlantic68%
15
1,383
(thousands)
Age 35-44
19%
55+ spent
billion on
ations last
20%
54% 35%
Creating
a home office
30%
l love
my home
Wanting to lower monthly housing costs
26%
64%
25%
Family is close by
20%
44%
work
15%
to a nicer bathroom
I don't want toUpgrading
lose independence
64%26%
33%
(thousands)
33%
1,4
1,3
1,3
So
1,3
1,3
High-Tech Home Improvement
Retirees are not just interested in traditional remodeling and
renovation activities. They’re also seeking new technologies
that can make their homes more convenient, connected, and
secure, and easier and less expensive to maintain.
•
Four in five retirees (80%) are interested in new
technologies to reduce their home expenses, such as
smart thermostats or apps to control appliances.
•
Three-quarters (76%) are interested in technologies to
monitor their health at home, such as sensors, alerts, or
medication reminder apps.
•
Two-thirds (67%) are interested in home technologies to
help them optimize their health, such as devices for air
purification or to improve their sleep.
•
Nearly two-thirds (64%) are interested in home
technologies to connect them with their family and
friends, such as video chat and interactive devices.
•
Six in ten (58%) are interested in technologies to help
them maintain their home, such as cleaning robots or
heated driveways.
16
0%
Figure 26: Percent who feel connected to their neighbors
80%
74%
70%
60%
60%
55%
55%
50%
50%
40%
Figure
30% 22: Percent of total home renovation expenditures by
20%
10%
Under 35
9%
0%
Under 35
35-44
45-54
55-64
65+
Base: Age 21+
Age 35-44
19%
roughly $90 billion on
year
Age 55+
47%
Age 45-54
25%
Figure 31: Number of home health care recipients, 2003-2012
Figure 30: Number of nursing home residents, 2003-2012
3,500
“Since I retired, I rediscovered
my neighborhood. I made new friends and started volunteering
in my community.” 3,281 3,434
1,455
3,172
1,446
3,026 3,100
1,446
2,976
3,000
1,439
2,836
1,435
1,436
2,500
1,412
1,416
3,464 3,460
2,681
1,426
1,426
(thousands)
%
Stronger Community
Connections
in Retirement
Figure 25: Median
cost of home renovation
project by type
In retirement, creating a better home can mean more than
just renovations. Many retirees take the opportunity to
Kitchen
$5,000
rediscover their neighborhood and more deeply connect
Roofing
$4,600
with their community. Before retirement, many younger and
$3,600
middle-age households can be so busy with work and family
Recreation rooms
$3,000
responsibilities that they don’t have as much time to explore
Bedroom(s)
$2,500
or get involved in their community. Retirees are far more
Bathroom
$2,400
likely to have the time and flexibility to build deeper and
Patio, terrace, or deck
$2,000
more fulfilling connections by volunteering, visiting museums
$1,200
and libraries, taking lifelong learning classes at community
Doors and windows
$1,200
colleges, or simply getting to know their neighbors better
(FIG 26). Source: U.S. Census Bureau, Home Improvements. May 2013.
(thousands)
%
Larger Home
30%
1,402
1,406
1,392
1,396
2,000
1,500
1,388
While some may1,386
think retirees prefer to spend time
largely
1,383
with people their1,376
own age, most retirees seek to interact and
1,366
engage with vibrant
communities of diverse ages. In fact,
1,356
compared to younger
people, older Americans are far more
1,346
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
likely to want diversity
in age and generation among their
communities and neighbors (FIG 27).
1,000
75%
500
67%
65%
0
67%
67%
61%
2003
2004
53%
2005
2006
2007 2008
2009
55%for Medicare and Medicaid Services, 2013
Source: Centers
45%
similar age
2010People
2011of a2012
and generation
and generations
47%
39%
33%
35%
33%
33%
25%
15%
Under 35
35-44
45-54
55-64
65+
Base: Age 21+
Figure 3: Percent who place a high degree of importance on living
70%
46%
National
60%
63%
South Central
Mountain
58%
South Atlantic
58%
Pacific
35%
Northeast
35%
0%
10%
20%
30%
40%
20%
70%
60%
72%10%
0%
60%
38%
50%
40%
27%
30%
80%
70%
50%
51%
40%
Figure 2: Crossing the “Freedom
Threshold”
42%
Great Lakes
Near
In a g
59% 58%
50%
51%
Heartland
66%
64%
Base: Age 21+
72%
Under 35
19%
74%
69%
65%
35-44
70%
45 -54
59%
41%
55- 64
56%
Age 61
17
44%
Health and Home in
Later Retirement
Today’s retirees have more options for how and where to receive care and support. Overwhelmingly, retirees prefer to
age in place by continuing to live independently at home.
Home Considerations in Later Retirement
New Options for Health and Care
Though people enjoy new freedoms during much of
retirement, as they age, health challenges and care needs
can become a larger factor in where people choose to live.
In fact, there are two distinct phases when it comes to
choosing where to live during retirement.
Among prior generations, most retirees had two options:
if they were healthy enough, they could continue living at
home; or they would need to move to a nursing home to
receive care if they became too sick or frail.
The first phase in retirement living – which can often span
now 15 to 20 years or more – is a time of more freedom and
new choices for how and where people live. This first phase
has emerged as people live longer and are often healthier
and more active than prior generations of retirees.
During the second phase – which often begins when people
are in their 80s – health becomes an increasingly important
factor impacting where people live. Among people age 85+,
three-quarters (74%) have difficulties with at least some
daily activities, such as housework, getting around the home,
or other everyday tasks.7 The average age of people entering
assisted living is 85.8
Today, however, there is a growing continuum of options for
retirees facing health challenges, including:
•
Retirement apartments and communities that offer
meal preparation, home maintenance, and other helpful
services
•
Assisted living communities that offer meal preparation,
home maintenance, transportation and other supportive
services, activities and programs that provide the
opportunity to stay active and involved
•
Cohousing, through which retirees live together and help
arrange or provide each other support as needed
•
Creative systems, such as the “Village” model, through
which older adults who live near each other form an
organized group with centralized access to coordinating
services and resources that help them age in place
These innovative living options often not only provide care
and support, but also create more opportunities for social
engagement and community activities, and promote wellness
and fitness.
18
Figure 21: Which
is21:
more
important
toimportant
homeowners:
their
Figure24:
Which
is more
to renovated
homeowners:
Figure
Percent
of
retirees
who have
theirtheir
home’s emotional
or
financial
value?
home’s
emotional
or
financial
value?
home by…
financial value
of
my home
70% Figure 28:The
receiving
Thepreference
financial
valuefor
of my
home
70% Retirees’ top
Creating
a home
office
The emotional
value
of my
home
35%
The
emotional
value of my home
65% long-term care
63%
65%
Figure 20: Top
reasonsTop
whyreasons
retireeswhy
would not leave
their
Figure
would
not leave
their
etirement
Figure20:
23: Percent
change retirees
in average
spending
on home
expenditures bycurrent home
current
home
My Own Home:
The #1 Choice for Long-Term Care
Figure
27: Type
of neighbors people54%
prefer, by age
l love my
home
30%
l love my home
54%
26%
Overwhelmingly, retirees
say their top preference for
25%
75%
48%
Family is
close by
is close by is to age in place 48%
receiving extended 20%
care,Family
if needed,
in
67%
67%
67%
theirI don't
own
(FIG
28). With 61%
new technologies
(such as
65%
wanthome
to lose independence
44%
15%
I don't want
to lose independence
44%
remote
diagnostics)-, growing numbers
10%
e 55+ spenttelemedicine and 55%
and generation
53%
I love my community
42%
my community
90 billion onof home care providers
4% to
42%
and
services, and renovations
5% I love
3%
47%
ovations last
and generations
45%
make homesFriends
more
aging-ready
(FIG 29),
it is increasingly
0% by
are
close
31%
Friends are
close by
31%
39%
possible for retirees-5%with health challenges to continue living
33%
33%
35%
-4%
33%
I can't afford
to move
to move
independently
at home.
Inafford
fact,
there28%has been28%
a significant
-10%I can't
-12%
0%
10% 20% 30%
40% 50% number
60%
80%
25%
-15%are
shift in where people
receiving
of 60%
0%care.
10% The
20% 30% 40% 50%
Under 35
35-44
45-54
55-64
65+
Age 50+ retirees has
who don’t
plan to move
nursing homeBase:
residents
declined
in
the
past
decade
(FIG
Source:
Joint Center for Housing Studies of Harvard, 2015.
15%
35 the
35-44number
45-54 of55-64
30), while at the sameUnder
time
people65+receiving
Base: Age 21+
care at home has increased (FIG 31).
%
4%
%
ople of a similar age
d generation
ople of diverse ages
d generations
40%
35%
30%
25%
0%
10%
20%
Bedroom(s)
80%
Bathroom
72%$2,000 85%
74% $2,000
72%
Flooring, paneling,
& ceiling
Flooring,
paneling, & ceiling
$1,200
$1,200
Doors and windows
Doors and windows
$1,200
$1,200
70%
Source:
Bureau, Home Improvements. May 2013.
Base:U.S.
AgeCensus
50+ retirees
60%
40%
1,436
30%
1,426
1,426
70%
1,406
1,396
1,376
Base: Age 21+
1,366
56%
1,386
1,426
28%
1,41226%
1,392
74%
21-24 25-29 30-34
1,376
55-64
45-54
National
1,392
35-39 1,383
40-44 1,388
45-49
1,383
1,388
69%
Great Lakes
3,434 3,464 3,460 3,464 3,460 0%
10%
3,434
3,281
3,281
3,172
3,172
3,026 3,100
3,100
3,026
Base: Age 50+ retirees; grade their climate/weather 80
2,976
2,836
2,681
3,500
36%
2,976
2,681
2,836
3,000
1,500
26%
2,000
1,500
75+
Pacific
0
68%
500
2003
2004
0
58%
Figure 18: Percent of pre-retirees who want to
AK
HI
HI
0%
WA
FREEDOM, NEW CHOICES
#5 Heartland
49 50-54National
55-59 60-64
65-69 70-74
National
75+
#6 Northeast
#7 Great Lakes
20%
30%
#3
MN
ID
SD
#5
WY
UT
CA
46%
AZ
CO
IL
63%
OH
IN
MO
MD
WV
VA
KY
OK
TX
MS
LA
63%
NJ
DE
DC
#3 South Central
SC
AR
#4
80%
WA
#1 South Atlantic
#2 Pacific
70%
NC
TN
NM
46%
Where Pre-retirees
60%
70%
Want to Stay
MT
77%
OR
Bas
ID
WY
MI
RI
Figure
3: PAPercent
place awho
highplace
degree
of importance
on living…68%
CT who
Figure
3: Percent
a high
degree of importance
on livin
#7
IA
KS
50%
VT
NH
MA
NY
WI
40%
ME
#6
ND
#2
Pacific
Figure 17: Percent
of retirees
satisfied
with
their cost
living
NV
Figure 17:
Percent highly
of#3retirees
highly
satisfied
withoftheir
cost of living NE
26%Central
#4 South
10%
Base: AgeMT
50+ retirees; grade their climate/weather 80%+
#1 South Atlantic
2011 2012
29%
Heartland
AK
S
67%
2005 2006 2007 2008 2009 2010 2011 2012
2003 2004 2005 2006 2007 2008 2009 2010
South Central
S
70%
1,000
500
Fi
48%
Northeast
38%
Figure 15: Where do retirees give the highest grades to their geographic region?
Great Lakes
32%
#2 Mountain 31%
Pacific
Northeast
2,000
South Atlantic
64%
OR
65+
Base: Age
Sources:
Joint21+
Center for Housing Studies of Harvard, AARP
50-54 55-59 60-64 65-69 70-74
Mountain
1,000
36%
South Atlantic
65+
55-64
44%
31%
1,402
44%
South Central
South Central
45-54
35-44
30% of retirees
Figure 16: Percent
highly
satisfied with31%
their climate/weather
2,500
2,500
30%
35-44
Under 35
South Central
3,000
1,346
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Age 61
Mountain
69%
7. 0%
Accessible countertops and cabinets
3,500
1,356
onsibilities,
National
Figure 31: Number
of home
health
care health
recipients,
Figure 31:
Number
of home
care 2003-2012
recipients,
2003-2012
Heartland
35%
1,402
1,366
1,356
1,412
1,406
1,396
20%
1,386
1,346
28%
1,416
(thousands)
(thousands)
1,416
1,426
10%
Age 61
(thousands)
1,436
6. Bathroom safety features
64%
56%
41%
1,455
1,446
1,446
1,439
1,439
1,435
1,435
40%
60%
74%
20%
0%
Base: Age 21+
Figure 30: Number
of nursing
residents,
Figure 30:
Numberhome
of nursing
home2003-2012
residents, 2003-2012
1,446
30%
Under 35
40%
75+
30%
74%
5. Lever-style handles on doors and faucets
10%
70%
1,455
1,446
37%
20%
69%
29%
28%
40%
30%
59%
50%
60%
55%
55% living
2. 60%
Single-floor
55%
55%
50%
50%
3. 50%
Extra-wide hallways and doors
50%
65%
40%
70%
60%
$2,500
74%
80%
1. No-step entry
70%
$3,000
$2,500
Patio, terrace, orPatio,
deck terrace, or deck
80%
$3,600
$2,400Own Home
$2,400
32%
Figure 26:Figure
Percent
who
feel connected
their neighbors
Figure29:
26:
Percent
who
feel to
connected
to their neighbors
Aging-ready
home
features
and community,
by age
and community,
by age
$4,600
Bedroom(s)
63%
34%
1%
Home
Roofing
$4,600
Roofing 4%
Assisted
Plumbing, Living
electrical,
etc.
$3,600
Facilitythe “Freedom Threshold”
Figure 2: Crossing
Recreation rooms
$3,000
10%Recreation rooms
Bathroom
1%
45%
Home
$5,000Nursing$5,000
Family Member
Kitchen
Kitchen
oose
50%
(thousands)
5%
9%
55%
As boomers enter their later retirement years and the need
for all types of long-term care increases, new services,
Figure 25: Median
cost
of
home
renovation
project
type
technologies,
and 25:
options
willcost
continue
develop
to enable
Figure
28:Median
Retirees’
top
forby
receiving
Figure
ofpreference
hometo
renovation
project
by type
long-term
people to receive
care care
how and where they most desire.
age
Nursing Home
Family Member
60%57%
56%
56%
1%
Upgrading
to a nicer kitchen
Home 57%
52%
52% 55%
4%
52%
Assisted 52%
50%
50%
50% 50%
48%50%
Living
48% in48%
48%
Adding safety features
the bathroom, such
44%
Facility
44%
as
handrails/grab
bars
or
walk-in
shower
45% 43%
10% my living situation so43%
Modifying
I could live on
15%
40%one floor if I had trouble with stairs
37%
9%
35%
home if my health worsens Own Home
7%
85%
30%
climbing steps
5%
25%
Under 35
35-44
45-54 for easier
55-64access 65-74
75+
kitchen
Under 35
35-44
45-54
55-64
65-74
60%
AL
GA
#1
FL
60%
#3 Mountain
66% 70%
64%
60%
NV
19
#5 Heartland
66%
64%
#6 Great Lakes
59%
58% 59% 58%
#7 Northeast
51%
UT
CA
CO
NM
AZ
Near work
Nea
In a good school
In di
a
51%
Preparing for Choices and
Challenges
This study reveals new choices and opportunities retirees have to live in homes and communities that can make
their lives even more fulfilling. Achieving your best home in retirement and navigating challenges requires careful
forethought and preparation, including:
1. When deciding where to live in retirement, whether you decide to move or stay in your current home, carefully consider a range
of priorities that will be important to you in future lifestages. These may include affordability, climate, proximity to family and
friends, recreational or cultural activities, opportunities for continued work, access to good health care, etc. Consider trying out
a potential area to live in retirement with extended visits or short-term rentals.
2. Consider all expenses when forecasting potential home-related costs during retirement, including mortgage or rent payments;
income, estate, and property taxes; and insurance, relocation, utilities, repairs and maintenance, and other expenses. It is also
important to consider whether you might want to renovate or remodel your home in retirement and plan and budget for those
expenses as well.
3. Assess whether you should pay off your mortgage before retirement. Paying off your mortgage before you retire can create
greater financial security and peace of mind. But there are many factors – such as your risk tolerance, interest rates, taxes,
estate planning, and other investment opportunities – that you should factor into this decision.
4. Don’t assume you will downsize your home in retirement. Moving to a smaller home can provide cash and reduce expenses, but
you may find your current or even a larger home better fits your lifestyle and family needs in retirement.
5. Prepare for long-term care, in case it is needed, by researching options that would enable you to receive care where you most
prefer, whether you choose to move to supportive communities and housing or to stay in your own home.
6. Consider home modifications and services that can empower you to remain in your own home if you face health challenges.
Modifications like installing lower counters and tables, replacing lever handles, enhancing bathroom safety features, and
changing your living situation to avoid the use of stairs can make it easier to get around your home. Home care services and
health monitoring and alert technologies can enable you to continue living independently as long as possible.
20
Endnotes
1
Age Wave calculations based on Federal Reserve data, 2013. Calculations include home equity only in primary residence.
2
Age Wave calculations based on survey responses and U.S. Census data, 2014.
3
Pew Research Center, 2014. “In Post-Recession Era, Young Adults Drive Continuing Rise in Multi-generational Living.”
4
PBS NewsHour, 2014. “Why more seniors are going back to college — to retire.”
5
New York Times, 2014. Kelly, C. “Choosing to Live Abroad in Retirement.”
6
Age Wave calculations based on U.S. Census, 2013. Includes migration within the U.S.
7
Centers for Medicare and Medicaid Services, 2009.
8
National Center for Assisted Living (NCAL), American Health Care Association (AHCA), Assisted Living Federation of America (ALFA),
Association of Homes & Services for the Aging (AAHSA), National Investment Center for the Seniors Housing & Care Industry (NIC),
2009. “2009 Overview of Assisted Living.”
Merrill Lynch Wealth Management makes available products and services offered by Merrill Lynch, Pierce, Fenner & Smith Incorporated, a registered broker-dealer
and member SIPC, and other subsidiaries of Bank of America Corporation.
Investment products:
Are Not FDIC Insured
Are Not Bank Guaranteed
May Lose Value
This article does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the author nor any other party assumes
liability for loss or damage due to reliance on this material.
©2015 Bank of America Corporation. All rights reserved. AR6SX48F | 471269PM
21

Home in Retirement: More Freedom, New Choices

Transcription

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