Downsizing Baby Boomers: Is it Better to Rent or Buy?
With baby boomers at or near retirement age, many are looking to downsize and leave their family homes behind. In the past, this meant purchasing a smaller dwelling with a smaller price tag. But with today’s baby boomers attracted to bustling urban areas with walkable neighborhoods and nearby shopping and restaurants, many are discovering that their next home may cost the same or more as their prior one. As a result, some baby boomers are concluding that renting, rather than buying, is the better option.
If you are currently facing this decision, you are not alone:
make up one third
of all home buyers
in the United States.
(HousingWire)
of Americans ages 54-65
plan to downsize within
the next 10 years.
(Trulia)
of all urban
rental applications
are for renters over
the age of 60.(Washington Post)
baby boomers
plan to downsize within
the next 10 years.
(CNBC)
What is so attractive about urban living?
- Proximity to medical services — 29% of relocating Americans ages 50+ indicated proximity to medical services was a top priority (AARP)
- Availability of amenities, including restaurants and shops — 74% of Americans age 50+ eat out at least twice each week
- More flexibility for travel — 58% of baby boomers travel at least three times each year
- Reduced maintenance and overhead costs
- Easy access to public transportation
Laly Kassa, Managing Director at Chevy Chase Trust, points out that initially, many clients assume that buying is the smarter financial decision. But after a thorough investigation of all the alternatives, they often opt to rent. “Retirement looks very different today than in years past,” says Kassa, “and that requires using a fresh perspective when choosing your next home.”
“There’s no wrong or right answer to this question,” says Leslie Smith, Chevy Chase Trust’s Chief Planning Officer. “The decision is unique to each client, taking into account not only the financial implications of their decision, but also the emotional and practical considerations.”
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