Downsizing
A T. Rowe Price survey of investors ages 21 to 50 lists five top financial goals: saving for retirement (72%), maintaining or improving current lifestyle (50%), creating or adding an emergency fund (36%), paying off debt (34%), and saving for a child’s college expenses (27%).
According to Demand Institute, > 40% of Americans ages 50 to 64 expect to move in the next five years. A study by Boston College’s Center for Retirement Research shows that those who move due to circumstances such as a job loss or divorce do not gain much financially when they downsized. These movers plowed almost all of their home equity back into their new homes, freeing up an average of just $26,000. A growing number of older adults are carrying mortgage debt than in the past; the amount of debt is also higher.
Percentage of Families with Mortgage Debt [1989 vs. 2010]
|
Age |
1989 |
2010 |
|
< 35 |
34% |
33% |
|
35–44 |
58% |
58% |
|
45–54 |
59% |
60% |
|
55–64 |
37% |
53% |
|
65–74 |
21% |
40% |
|
75+ |
6% |
23% |
Median Mortgage Debt [1989 vs. 2010]
|
Age |
1989 |
2010 |
|
< 35 |
$73,000 |
$120,000 |
|
35–44 |
$66,000 |
$140,000 |
|
45–54 |
$42,000 |
$115,000 |
|
55–64 |
$33,000 |
$97,000 |
|
65–74 |
$14,000 |
$68,000 |
|
75+ |
$10,000 |
$51,000 |
Among homeowners age 60+ who recently told researchers of the University of Michigan Health and Retirement Study that they had “more things than they need,” over 75% stated that the sheer volume of their possessions made them “somewhat” or “very” reluctant to move. Among older Americans, a large majority settled within 20 miles of their previous homes according to a 2009 Boston College study.
Average New Home Size in U.S.
|
Year |
Sq. Ft. |
Year |
Sq. Ft. |
|
1973 |
1,660 |
2000 |
2,266 |
|
1980 |
1,740 |
2005 |
2,434 |
|
1985 |
1,785 |
2007 |
2,521 |
|
1990 |
2,080 |
2010 |
2,392 |
|
1995 |
2,100 |
2015* |
2,150 |
*Projected