“As baby boomers age, they are expected to make a mass exodus from the homes they own for rentals or senior living facilities. Even if you’re set on aging in place, there are financial and health considerations that should prompt you to consider downsizing or creating a back-up plan.”
Once the decision has been made about when to retire, the next question is where to live during retirement, says CNBC in a recent article “The next big question you need to answer after you decide to retire.”
Living through the experience of finding an appropriate living situation for an elderly parent gives boomers a different perspective on making their own decisions on where to live during retirement. Some people, having gone through this experience, launch companies that help others, including everything from holding estate sales and liquidating possessions to finding home contractors and movers.
The most common comment they hear is, “I wish we would have done this sooner.”
Aging in place is a goal for most retirees, who are attached to their homes and their communities. The idea of moving to a nursing home, assisted living or continuing care community is not appealing at the beginning of retirement. However, the idea of downsizing is becoming increasingly popular as boomers enter their retirement years. A survey from TD Ameritrade found that 42% of Americans plan to downsize in retirement.
A 2018 report from Fannie Mae points to a “mass exodus” of boomers from the 32 million homes they own and occupy, as they leave for rentals, senior care facilities or pass away.
There are two key reasons to get going on the relocation plan: health and money.
The more assets a retired couple has, the more their discretionary spending increases by downsizing. When they stay in a large house, the equity they have in the home is not growing as it might. The seniors could find themselves house poor. Moving into a smaller home cuts housing expenses, including insurance and maintenance.
Health is another issue. If your home is aging-friendly, perfect. However, if your home has a lot of stairs or narrow doorways and if bathrooms and kitchens have not been adapted to be age-friendly, there could be dangers as you age and your physical prowess diminishes.
Mental health is another consideration. If mental health declines, staying in the home without live-in care may become dangerous. Loneliness also is a factor, as people who live in single family homes without activities become lonely. An adult community with all of its activities might be better for both physical and mental health.
The ideal goal: set aside some time to visit these facilities now, before there is any pressing need. You should also start putting your estate plan in order. That includes power of attorney or trust documents. Even if your plan is four or five years down the road, planning in advance can make this large life transition a lot easier.
Reference: CNBC (September 14, 2019) “The next big question you need to answer after you decide to retire.”