Baby Boomers Ignoring Common Mortgage Wisdom

The importance of planning for your retirement in your real estate investments has been discussed at length in the past. As you grow old, it’s often a good idea to downsize to a smaller home in order to eliminate any remaining mortgage loans for the rest of your golden years. However, according to a survey from the Demand Institute, a surprising number of Baby Boomers are going against conventional wisdom.

The survey found that many retired people are content to stay put in the homes they spent their lives in, even if they are too big or ill equipped to fit their needs. A full sixty-three percent of Baby Boomers have no plans to move from their homes, most of them having lived in their current homes for more than the past ten years. Though some of these people need to stay in place due to financial hardship or other situations out of their control, eighty-five percent are choosing to remain where they are.

Meanwhile, of the Boomers who do plan to move, many are declining to downsize. About fifty-eight percent of the Boomer population surveyed said that they want to have at least as much home as they currently have, if not more. A full forty-six percent of people apparently intend to upsize their homes into something better when they move.

Unfortunately, this is all adding up to an increase in debt. Baby Boomers are more burdened by debt than previous generations at the same stage of life. Since 1992, the balance of their mortgage loans has risen 142%. Boomers are therefore advised to carefully consider their finances going into retirement, and just how much they need out of a home in their golden years.

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