During the recession of 2008 and for a long time afterward, moving dropped off the map, especially for people who were retiring. For some years after the recession began, according to the Brookings Institution, both Florida and Nevada actually suffered out migration – not because so many people were moving out of these states, but because nobody was moving in.
For half a decade retirees stayed close to home. They couldn’t sell their house, so they couldn’t move. Many people were forced to retire early, which meant their finances were even more stressed. Many baby boomers also still had kids in school, and so they didn’t want to move anyway.
But now things have changed. Moving is back in style. In addition to new retirees, there is a backlog of people who retired a few years ago who now want to move out of big expensive states and into warmer, less expensive states.
The traditional retirement havens in Florida and Arizona still pull in many retirees. Last year the Phoenix metropolitan area topped the list of cities gaining population among people 55 and older. Tampa, Orlando and Jacksonville were in the top ten. But the Carolinas are also drawing their share of retirees, and a lot of retiring baby boomers are setting off for smaller cities like Nashville or Austin.
Here are the five main reasons retired people are now moving:
They can finally sell their house. The real estate market suffered a historic slump during the Great Recession, and it has been slow to make a comeback. But now both sales and prices have returned to more normal levels, meaning people in California and the Northeast – and even in the Midwest to a lesser degree – can finally sell their homes. Fewer people are underwater on their mortgage, which means they have more equity, while mortgage rates are still low and credit is easier to obtain.
Their stock portfolios have recovered. Baby boomers were not only frozen in place for half a decade, but they suffered huge losses in their savings and retirement nest eggs, which made them more cautious and less likely to pull up stakes and start a new life. Now that markets are back near historic highs, baby boomers are flush with more funds to use for down payments, moving costs and all the other expenses that go along with starting a new life.
It’s expensive to live in California and the Northeast. Although many states have slowed the rate of increase on real estate taxes – New York, for example, instituted a 2 percent cap – taxes are still high and going higher, even if at a slower pace. Retirees move to get away from high taxes. But there’s also the high cost of insurance, entertainment, heating and all the other necessities of living in the north.
It’s cold. Global warming may have brought a marginal rise in temperatures worldwide, but that’s cold comfort for those who see the outside thermometer stuck at 20 degrees. The unusually cold and snowy winters of the past two years only add to the motivation of retirees to find a more comfortable lifestyle in a warmer climate. A desire for healthier lifestyles also prompts people to seek out a climate where they can hike and bike and play outdoor sports all year round.
They’re going to move anyway, so they might as well go someplace nicer. Many boomers are moving not to retire, but to take advantage of late-in-life job opportunities. They have been downsized from their full-time careers, and are now looking at lower paying, but also lower pressure jobs outside major metropolitan areas. Along with low-powered jobs or part-time positions, they’re looking forward to gaining more leisure time and paying less “overhead” for their lifestyle.
The countertrend. Despite the fact that more people are moving, the majority of retirees still age in place. So don’t feel left out if you want to stay in your old neighborhood and live near your children and grandchildren. And then there is one countertrend. While most retirees head south, there are some who turn north. Northern states from Maine to Washington are losing population among those age 55 and over. But four states – New Hampshire, Vermont, Idaho and Oregon – are appealing enough to actually gain population among people 55 and over.
Written by Tom Sightings of US News & World Report
(Source: US News & World Report)