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Brokers will play a key role in helping homeowners live more comfortably and be more financially secure in retirement, as three out of four adults say they plan to downsize their home to lower ongoing costs and cash in on the equity.
Read more: You May Not Be Saving Enough for Retirement
According to the results of a new survey of 3,718 adults by Merrill Lynch and Age Wave, in order to help fund retirement, 67 percent would be willing to move to a less expensive location, 47 percent would consider selling their home and renting an apartment, 42 percent would take equity out of their home or refinance, and 31 percent would take out a reverse mortgage.
Additionally, the survey found that more than 25 percent of Americans age 50 and older are now willing to rent out a room or part of their home on a short-term basis through Airbnb or other vacation rental sites to make extra money during retirement.
Creating an initiative at your brokerage to specifically reach out to baby boomers and educate them on their housing options and current market conditions makes sense as the retirement wave is dramatically increasing. The study says approximately 10,000 new retirees are being added per day. However, more than half the U.S. population is underfunded for retirement in terms of savings, and only 13 percent have saved $300,000 or more, the study cites. With the average home equity at more than $200,000 for those over the age of 65, the home is usually their biggest financial asset.
According to a sister study on housing in retirement, also by Merrill Lynch and Age Wave, 72 percent of homeowners age 65 and over no longer have a mortgage. Of those considering a move, 29 percent plan to move closer to family. But the number one reason some retirees don’t plan to move is the sentimental attachment to their home (54 percent).
—By Erica Christoffer, REALTOR® Magazine
Source: “Finances in Retirement: New Challenges, New Solutions,” Merrill Lynch (Feb. 2017)
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