Retirement & Financial Planning Report

Above half of retirees never move from the homes they occupied while in their early 50s while nearly a fifth move around the time of retirement and then stay put, a study has found, while of the rest, about half move only when their state of health requires it.

“For many households, particularly those with less wealth, their home equity is larger than their financial assets. Tapping home equity in retirement could provide millions of retirees with a way to make ends meet or to maintain their standard of living,” the Center for Retirement Research said in a report on use of the value of a home for retirement income.

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It said that the most direct method of doing so would be to sell the home and buy a smaller, less expensive one, producing cash upfront and likely reducing their costs of ownership. An alternative is to borrow against the value of the house, for example through a reverse mortgage.

“However, few households choose either of these options,” it said adding that “most retirees are attached to their homes and want to age in place” and are reluctant to use the value of their homes to help finance their retirement. “Households either stay in the home they were in during their 50s, or they buy a new home around retirement, where they generally remain for the duration.”

It found that retirees fall into four general groups:

“Never movers”—53 percent stay in the home they lived in when they were in their early 50s until death.

“Stable movers”—17 percent move around the time of retirement and then generally stay in that new home until death.

“Late movers—16 percent stay in their original home until their 80s and then move—for example, into a rental or an assisted living facility—often because of health conditions.

“Frequent movers—14 percent move frequently; they “appear to face financial challenges: a much smaller share of them are two-earner couples; the head experiences more unemployment; and the household enters the survey with less financial wealth.”

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