More Americans prefer to own rather than rent their homes in retirement, according to survey results from Voya Financial.
Voya conducted a survey of 1,000 Americans (from millennials to retirees) to gauge the opinions of Americans on a number of topics related to where and how they want to live in retirement.
Among current retirees in the survey, approximately 8 in 10 (79%) own their home while 18% rent.
Of those who had not yet retired, even more (85%) said they planned to own their home in retirement, while a smaller number (12%) anticipated renting. And, the survey finds, this goal of homeownership in retirement was consistent across all segments of non-retirees regardless of gender and age (men, women, millennials, Gen X and baby boomers all represented between 81% and 87%).
Voya’s survey also reveals some deeper insights into the topic of mortgages.
A significant majority of homeowners with an outstanding mortgage were optimistic about paying it off prior to retirement, according to the survey, although the survey results suggest that some of these homeowners may be overly optimistic.
According to the survey, one-third (33%) of non-retirees reported having a mortgage and roughly half in this group (16%) had an outstanding balance of $100,000 or more.
Less than one-in-five (19%) of those non-retirees with a mortgage expect to still have a mortgage in retirement. However, among current retirees, more than one-quarter (26%) still have an outstanding mortgage balance and a significant percent of this group (16%) still had a balance of $50,000 or more.
“Those heading toward retirement should plan accordingly so they don’t overestimate their ability to achieve their goals,” the survey states.
The survey also looks at other trends around Americans’ concerns with housing in retirement – among them, do Americans prefer to move in retirement or stay in their current location?
Voya’s survey noted an interesting trend — Americans are almost evenly divided on whether they move or stay in one location when they retire.
Exactly half (50%) of all respondents said they wanted to move to a more desirable location when they retired, according to the survey. Meanwhile, almost the same amount (49%) thought their current location and lifestyle were ideal.
When looking at those who owned versus rented, those numbers changed quite a bit.
The survey finds that 62% of current homeowners stated that their ideal retirement location is where they live now, compared with roughly one-third (34%) of renters.
Current retirees are also much more in favor of their current location than non-retirees. According to the survey, nearly three-quarters (72%) of retirees said they were in their ideal location right now, versus 43% of non-retirees.
Voya’s survey also digs into the factors that are most important when deciding where to live in retirement.
Respondents were asked to choose between access to affordable health care, proximity to family and friends, cost of living, proximity to amenities, climate, and the type of housing or the preferred property size.
What the survey found was that proximity to family and friends is the most important factor in deciding where individuals want to live in retirement, with 38% choosing this.
According to the survey, far fewer were most influenced by the cost of living (12%), convenient amenities (12%), climate (11%), their preferred type of housing (9%), or the size of the home and property (5%).
Very few (6%) also cited access to good or affordable health care as the primary factor in deciding where to live in retirement, according to the survey.
Voya’s survey also looks at how housing expenses compare to other big financial concerns in retirement.
The survey identified health care as the expense that people are most worried about in retirement – with 41% saying this is their biggest worry. The second biggest concern was day-to-day living, with 22% of survey respondents saying this was their main concern. Housing costs – including mortgage and rent – came in third, with 15% of survey respondents saying this is their biggest concern.
The survey found a slight uptick in younger participants’ concern for housing costs, with around 19% of those between 18 and 44 years in age.
“This would be expected as housing is likely more relevant at this stage of life — many are dealing with rent and mortgages and have not yet experienced major health issues,” the survey states.
-- Related on ThinkAdvisor: Wade Pfau: Retirees Should Consider Reverse Mortgages