Today we continue our coverage of the great retirement book What Retirees Want. It is packed full of great information and statistics about the state of retirement today.
If you’ve missed any posts in this series, there are two ways to catch up. You can begin with the first post, which is an introduction and overview of the book, and click through to the next posts at the end of each one you read. Or you can check out my retirement category and scroll through the posts there.
Like with other books I’ve reviewed on ESI Money, I will share some key passages from this one and give my thoughts on their conclusions.
Today we’re talking about where people live in retirement and the various decisions around housing.
Let’s get started…
Stay Put or Move?
The book starts out with a discussion of an issue most retirees deal with — either before or after they retire: should they stay put in their current home or should they move (in theory to a better location, nicer home, etc.)?
It makes this comment:
Many retirees, especially older ones, intend to stay put, what’s called “aging in place.” When we asked why, most simply said because they love their homes. They also feel that moving and relocating might be a big hassle. Other common motivations include proximity to family, love of community, and the desire to remain independent.
They even break the numbers down into a chart detailing these future living preferences.
The results:
Stay in current residence and never move:
- Silent Generation – 69%
- Boomers – 47%
Move into different residence in current community:
- Silent Generation – 15%
- Boomers – 12%
Move to a different community:
- Silent Generation – 10%
- Boomers – 25%
Not sure:
- Silent Generation – 7%
- Boomers – 17%
I have read over 50 retirement books now and both the advice of what to do (whether to move or not) as well as the data (on what people actually do) is all over the board. So it doesn’t seem like there’s one “right” answer or data on what happens.
That said, I do have some thoughts on the subject (as you might have guessed):
- I would say the best thinking I have seen is in Wes Moss’ new book, What the Happiest Retirees Know, which I will be covering in detail on ESI Money once I finish this book. He makes two major conclusions related to housing that define the happiest retirees: 1) They live close to 50% or more of their children and 2) they have their mortgages paid off (or are within a few years of it). Other than those findings, I think there are a gazillion options for retirement housing.
- We have been around and around on this subject, trying to corral so many issues to come to a decision. The first decision is what city to live in. We currently live in Colorado Springs which is pretty amazing for most of the year. Plus both of our kids live here. The only downside is that winter can be long (as long as November to May some years). Yes, there are breaks during that time with many very nice days so it’s not nearly as brutal and dreary as Michigan, but winter is very looooooonnnnnngggggg here.
- So we’re trying to combat the long winter by snowbirding. We’re in Florida this year trying it out, and if this works (either as is or we can tweak our plan a bit to create something we like), we’ll be set — 9 months in Colorado and 3 or so months somewhere else in the winter. If this doesn’t work, we’re kind of back to square one.
- If we decide to stay in Colorado, the next question is in what house. We’d like to be in a smaller house, but we don’t want to give up the location, walkability, easy access to stores, etc. that we have now. And there aren’t really any smaller homes in our area. Of course we could move to a smaller one, but this would likely mean 1) paying an extra $200k for a smaller (probably newer) house (yes, the market is that crazy here) and 2) moving to an area that was “nice” but not as nice as what we have now. Given those options, we’re kind of “stuck” in our 3,700 square foot house with two adults and a cat.
- The next question is should we upgrade our current home. It’s about 20 years old and is starting to look it. Of course we’re pretty happy with the way it is (we’re easy to please), but if we ever do sell we’ll probably need to make some upgrades. So shouldn’t we complete those upgrades now and enjoy them instead of simply making the changes to attract a better buyer right before selling?
- And the final wild card is my dad. Where will he end up? Currently he’s living in the small Iowa town I grew up in most of the year and is now with us in Florida scouting places. Where will he want to go and how should we change our plans based on what he does? As I said, it’s a wild card at this point.
So for now we own a home in Colorado and spend some time in Florida during the winter. Maybe we’ll change plans and maybe we won’t. Time will tell.
The Upsize Surprise
This book does share some thoughts on downsizing in retirement.
Here’s a summary:
Our studies revealed that half of those who move in retirement downsize. And they do so for the pragmatic reason of cost and maintenance reduction, as part of a program to simplify and declutter their lives. Not surprising, we’re beginning to see web-based, community, and commercial services that offer to help people digitize their papers and photo albums as they clear out their garage and attics.
However, we also learned that a surprising 30% upsize into a larger home, and half of the higher-net-worth retirees surveyed intend to upsize. The rest change location but not home size.
Retirees most often say they upsize to have more room for family who visit. Some are anticipating that family members may move, and one in four wants a more prestigious home, one that represents their success in retirement or that rewards them for a career’s worth of effort. Downsize or upsize? Affordability aside, it comes down to the role of the home in retirees’ family lives, social lives, and lifestyles.
My take on these:
- Our main motivation for downsizing would be simply to have less space. There’s no way two adults and a cat need five bedrooms and 4.5 bathrooms (plus an office — I don’t have to use a bedroom for an office). If we got down to 3 bedrooms, 2 baths, and about 2,000 square feet, that would be more than enough. Costs aren’t really a reason why we’d want to downsize, but it’s not bad to pay less for living either.
- “Help people digitize their papers and photo albums.” My wife is working on this project now…sorting through our photos and deciding which ones to keep (do you know how many terrible pictures accumulate through the years?) Then, once she gets down to the group we want to save, she needs to select a service to scan them. We’ll see how the effort goes but I’m skeptical that it will be solved anytime soon.
- “Clear out their garage.” Don’t get me started on this subject. A good portion of the homes in our area have to park their cars in the driveway or the street because their garages are filled with junk. When I say “filled”, I mean almost completely filled — two car stalls. And when I say “junk”, I mean junk — piles of stuff so heaped on each other that it’s impossible to tell what most of it is. I know this because I see the garages as I walk the neighborhoods (when they have the doors open). What gives with all this junk? They really fill up a 3,500 square foot house AND need the garage space too? They probably own a storage unit or two as well! It’s ridiculous!!!!
- “30% upsize into a larger home.” The only scenario where I would see us doing this was if my dad came to live with us. We have enough room now, but I think he’d want his own space, so we’d need to upgrade to a home plus a smaller house also on the property. Not sure if this will ever happen, but it’s the one thing that possibly could cause us to upsize.
- “One in four wants a more prestigious home, one that represents their success in retirement or that rewards them for a career’s worth of effort.” I have ZERO interest in buying a new, huge home to show how successful I was/am. I don’t need to impress anyone. We saw a lot of places in the Parade of Homes that seemed to fit this description — over the top houses that appeared to be built at least in part to demonstrate how well the owner was doing. Personally I think the owners are making up for something lacking in other areas of their lives. Anyway doing something like that would just be a waste for us.
Let’s move on…
Renovation and Home Services
The book covers the subject of home renovations, beginning with this:
When Americans think of home renovation, what often comes to mind are the endless array of fix-it-up shows on the HGTV network. The homeowners are young couples and only the renovators show much age and experience. That’s another example of ageism by omission, because a high percentage of retirees want to turn their houses into their dream homes for the new chapter in their lives. As one retiree told us, “We always had plans to make our home better, and to make it more of what we wanted. Now that we’re retired, we have the time, flexibility, and savings to do just that.”
Retirees may love their homes, but they also love to make their homes even better. The market for serving them is already massive and poised for continued growth. Americans 55 and older spend over $117 billion annually on home renovations. That’s half the national total, and their spending is on the rise – although they remain largely ignored by modern media and marketing.
Most renovations make retirees’ homes more functional, attractive, comfortable, and versatile. Upgrading kitchens and bathrooms are among the most common renovations by retirees intending to stay in their homes throughout retirement. But interestingly, atop the list is creating a home office. That makes sense given how many retirees choose to work or start business in retirement, including those who work as independent consultants or contractors and those with jobs that can be performed from home.
Some thoughts from me:
- Maybe HGTV needs to start a show called “Glam Up My Retirement Home.” LOL.
- If we decide that the Colorado/Florida thing will work, we’ll probably upgrade portions of our house. The only problem with this is that both of us have terrible design skills, so I’m thinking we would have to have someone help us — to see what could be and make decisions accordingly.
- Most of our changes would be updating/upgrading parts of the existing home. New flooring, new stair rails, new bathrooms (the kitchen is pretty good), etc. I may even get one of those fancy toilets that does everything but fly you to France.
- That said, there may be a couple additions. On that list are a three-season room that my wife thinks she might want and a completely new backyard landscaping effort to go along with it. If we had the room and if our neighbors weren’t so close, a pickleball court would be a must as well. Hahahaha.
- As I mentioned, we have an office so we don’t need another one. We would probably take out the carpet in it though and replace it with hardwood floors.
As we wrap up this topic, the book shares the top ways retirees renovate their homes as follows:
- Creating a home office – 35%
- Improving curb appeal – 34%
- Upgrading to a nicer kitchen – 32%
- Upgrading to a nicer bathroom – 29%
- Adding safety features in the bathroom – 28%
- Modifying to live on one floor – 15%
- Modifying to make it easier to get around – 9%
- Installing a ramp, lift, or elevator – 7%
- Installing lower kitchen counters or cabinets – 5%
We’d be up for “improving curb appeal” (we did just get a new tree for the front yard) but most of the landscaping we’d do would be in the back.
We wouldn’t “add safety features” to our master bath but we would like to 1) take the carpet out of the bathroom area (it’s not where the toilet is but we do have carpet where the sinks, shower, and tub are) and 2) expand/upgrade our shower area.
Other than that, we’d simply update areas around the house.
That’s it for today. We only have a few more posts left on this book!
For the next post in this series, see What Retirees Want, Affording Retirement.
Bernd Doss says
I mostly agree with the facts presented, but one thing that I didn’t see was retirees moving to be nearby better medical care facilities. In my sixties we stayed put, near our children. In our seventies we downsized from a moderately sized home to 1900 sq ft., two bedroom, two bath newly built home in a different area, but with superior quality medical services. We still are close to family and friends who visit often. They just have to drive a little bit farther. I often wonder if others do move for better medical care availability.
Refugee from Academia says
Yes, I hear/see this all the time. I work at an academic medical center, and lots of apartments have either medical/nursing students or older people who want to be RIGHT THERE. I hear this about other retirement spots I research.
ol70 says
I’m with you in the desire to downsize, the urge is strong and it’s going to happen lol. The only point I’d make is on those who “upsize” in retirement, I used to think the same way about it being too much or them showing off/making up for other shortcomings. But what I’ve come to realize is just how damn much money there is out there.
Those homes that seem ridiculous to us are probably extremely modest compared to the means those people have, and it’s probably a 2nd or 3rd home. It’s all relative. They use is as a hedge against inflation and an alternative place to park assets vs more investments that they don’t need. Why not gain some level of utility from those dollars at least. It’s a rounding error for them.
Then again I could be wrong on a broader scale, but this is just what I’ve personally observed. The level of wealth out there never ceases to amaze me still to this day.
Scott H says
We moved to Arizona recently, and kept about the same square feet as our previous home, but it’s all on one level-the knees say thank you! We also have my mother-in-law with us for all but the summer months. She has her own “wing” of the house and we get to enjoy her home cooked meals.
RWW says
My suggestion is stay where you are. By far the cheapest option and you must be happy there.
We moved from 1500 sq ft of 40 years to retirement condo with 3400 sq ft never happier and no maintenance of any kind.
Can’t snowbird have disabled daughter who lives on own but relies on us to stay independent so we picked an area near her 10 miles from our old home.
We try to stay less than 5 hours away and everyone is happy.
Side note I loved my job and was able to stay to age to age 75.
MI 175 says
My experience is often the opposite of most people, including ESI readers and surveys. I sometimes share to show there are other perspectives.
1. We retired and upsized! We went from a 3200 sf house to a 1900 sf condo. That condo was too small in Covid, so we moved to a 2400 sf house. Much happier, but not so big as to have rooms we don’t use. We intend to stay long term, but the house has two floors so that may be a problem eventually.
2. We have a mortgage with 28 years left. This was so we had more cash available ($600k on a $1.5 million purchase) either to invest or have cash on hand. At 3.25% (interest deductible), we should be able to make a higher return. We also have (hopefully incorrect) fears about extreme scenarios of political or financial instability where being heavy on cash might be helpful. Also, there is the concept of “keep your powder dry”. The $2600 mortgage payment is not a problem since our budget is $15k/ month (and we are not drawing down our retirement savings).