When do most people decide where they ultimately want to end up living? Later than they should, according to a study published last year by the American Association of Retired Persons (AARP).
AARP surveyed 1,300 adults age 50 and over to help monitor housing needs and preferences of older Americans. The survey found that just a quarter of those surveyed have made plans for where they will ultimately live.
Then again, who wants to confront the inevitable?
Or, maybe it’s just that people want to stay in their homes. More than 80 percent of those surveyed said they’d prefer never to move. Seventy percent believe they will be able to accomplish this. Forty percent have lived in their homes for more than 20 years. Fifty percent have lived in their current geographic region for more than 30 years. Approximately 70 percent are very satisfied with their housing and neighborhood choices.
Seventy-five percent of those surveyed live in a single-family detached home. Eight-two percent own their own homes; 52 percent don’t have any mortgage debt on their homes. A third live alone, half live with one other person and nearly 20 percent live in a household with three or more people. Seven percent of those surveyed have grandchildren living with them full-time.
These sorts of statistics are of great interest to residential developers targeting older Americans and their retirement housing needs. “Active adults” is the phrase used by Del Webb Corp., America’s leading builder of retirement communities. The phrases are designed to eliminate the stigma associated with the word “senior.”
The company doesn’t think of its buyers as being old, says Martha Moyer, a manager with Del Webb. We don’t think of President Clinton and Jane Fonda as being old. Instead, this is their time of great freedom, to travel, pump iron or volunteer for a charity.
Some people do plan to make a move, and, in fact, recent surveys suggest that number may be growing. In a recent survey of Baby Boomers (a phrase covering 80 million Americans born from 1946 to 1964), Del Webb found that nearly 13 percent would consider crossing state lines for a retirement move. For northerners, warm weather is a big draw. Mountain states with recreational lakes are popular. States with low or no personal income taxes or inheritance taxes are attractive to those concerned with their estate planning.
What are your options? Staying where you are can be tough financially, particularly if you live in an area where rising property taxes have outstripped your income. If you do want to stay, and you’re over 62 years of age, you might consider a reverse mortgage.
A reverse mortgage allows you to tap into the equity you’ve built up in your home. With a regular reverse mortgage, the bank pays you each month, drawing down on your home equity. You need not pay back the loan until you sell your home or move from it. Another option is a reverse equity line of credit. Like a home equity loan, the reverse line of credit allows you access to your home equity, with the ability to draw down when you need it. Again, the loan need not be repaid until the home is sold.
Your home may not be as easy to live in as you get older. You may need to spend a little money making some minor adjustments that will ease the transition. For example, you may want to replace the bathtub with a walk-in shower. You may also want to install grip bars in the bathroom and hallway.
Instead, you may want to trade down to a smaller condominium, coop or ranch-style single family home. The ideal home will be all on one level, less expensive to maintain, and allow you to travel feeling the property is safe and secure.
Active adult communities are springing up all over the country. Often, these new developments are age-restricted, though adult children over a certain age may live with you. And, of course, grandchildren are welcome for extended visits.
The nice part about these active adult communities is that they often have good levels of security, excellent amenities like golf courses, swimming pools, tennis courts, and work-out facilities, and there are a lot of other people your age who live there. On the other hand, you’re living in a homogenized mini-society that is, in some ways, a little cut off from the rest of the metropolitan area.
If you choose an active adult community, make sure you take the same precautions you would if you were buying from any new construction builder. Thoroughly check out the reputation of the developer. Talk to residents of other communities he or she has built. Ask what the monthly or annual association fees are and what they cover. Do you have monthly membership fees to the clubhouse and workout facilities or is it pay as you go? Read the documents of the development and find out who actually owns the amenities. Have they been deeded to the community, or does the developer own them and lease them to the community.
Finally, you may need better access to medical facilities as you age. Make sure the community you choose is close to excellent health centers, in addition to the shopping and services you need for daily life. You aren’t going to want to drive 5 miles every time you need a quart of milk.
If you don’t think through your choice ahead of time, two things might happen. You might find yourself “re-retiring,” that is, moving somewhere only to find you don’t like it and have to move again.
Or, you might find that the choice has been made for you.
April 7, 1997.
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