There’s No Place Like Home
April 24, 2017
Where do most folks want to live when they retire? The answer for the majority is simple – their existing home. Even my 88 year old mother fights to stay in her home, resisting as long as possible the time when she will need to move. The housing choices of Americans can give insight into investment trends, and the plans and preferences of retirees will become increasingly important. A recent survey of retirees made for an interesting read.
While most retirees remain in their existing home, 57% report that they want a place that is easier to maintain, and 40% state they want a home that is easier to get around in. When it comes to what a home has to offer, 35% would like a dedicated office, and 32% want a new kitchen. Not surprisingly therefore 31% want a new floor plan. Not all retirees are the same though, with 27% reporting a preference for more space while 23% want less space. Overall the results suggest that building contractors, building suppliers, in-home elevator companies, and the appliance industry all have a very positive outlook in terms of demand from retirees for their products and services.
Most financial advisors would argue that a retiree’s choice to stay in their existing home will be expensive. The costs of home ownership tend to rise, and this tendency is exacerbated as one becomes increasingly dependent on others to perform maintenance tasks. Moreover income from work will generally be much higher than the income available from investments and retirement plans. As a consequence, careful planning is a must in order to keep what for many is their most expensive lifestyle asset, and one which will be critical to happiness in retirement. Retirees may find it difficult to get a traditional loan that might be needed for a major home improvement project as traditional lenders look with scrutiny on the various sources of income for retirees. Some recommend that retirees secure lines of credit prior to actually needing to borrow money for costly home improvements.
Living options in retirement are vast, and the decision making process starts with the basic question about whether to downsize or maintain. Do we move to a “fun in the sun” location or stay put? All decisions are individual in nature and the pros and cons must be assessed specifically to each situation. As is always critical, planning and discussing these issues with your spouse, family, friends, and advisors can help sort out what might be one of the most important decisions about your retirement.
Carl Gambrell
