Where Retirees Want to Live Now

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According to a recent study sponsored by Merrill Lynch, by age 61, most people finally feel free to live where they want to live, rather than live where they have to live because they need to commute to work or have family obligations.

And it's no surprise where people want to live: the Sunbelt.

According to a U.S. Census Bureau update released last week, the fastest growing metropolitan area in the U.S. from 2013 to 2014 was The Villages, a retirement mecca outside Orlando, Fla. Among the 20 fastest-growing metro areas in the U. S., six were in Florida -- despite the fact that these areas experienced more deaths than births. In other words, after a lull caused by the Great Recession, the migration of retirees to Florida has not only re-emerged, but is growing as fast as ever.

According to the Census update, two other Sunbelt states, Texas and California, also shared top billing as destinations for people who are relocating. The Carolinas saw outsized growth as well. North Carolina has become the 9th most-populous state, up from the 10 th in 2013, and South Carolina scored two metropolitan regions in the top 20: the retirement hubs near Myrtle Beach and Hilton Head.

Meanwhile, Tucson, Ariz., surpassed the 1 million population mark last year, while the metropolitan areas anchored by Detroit and Cleveland saw the largest declines.

If baby boomers are moving out, who's moving in? The millennials, known as a generation of renters, are finally beginning to enter the housing market, while middle-age Gen Xers are slowly beginning to appreciate the virtues of the suburbs.

But it's the baby boomers who are driving the market, as they will for the next decade, and they are heading South and West. According to the Merrill Lynch study, which surveyed nearly 6,000 adults, the most popular region for retirement is the South Atlantic, from Virginia to Florida. The Southeast is followed by the West Coast, and then the Mountain West, from Colorado to Arizona and Nevada.

And size does matter. Baby boomers want a smaller place, for the obvious reason that there are fewer people living in the house. They're tired of cutting the grass and fixing the roof. They want a place that's more convenient and easier to take care of. The bonus: They typically lower their housing costs and free up cash either to cover ongoing expenses or finance a new lifestyle featuring more travel, entertainment and spending on health and recreation.

After decades of driving the kids around and commuting to work, boomers also want to cut back on their drive time. So they are moving to walkable neighborhoods in smaller cities, ideally with public transportation and less traffic congestion. So it's goodbye to New York, Philadelphia, Chicago and Los Angeles, and hello to Savannah, Ga., Austin, Texas, and Portland, Ore.

But some things never change. Over 80 percent of baby boomers own their own home (compared with 60 percent of people ages 35 to 44), and they want to keep it that way. The majority of baby boomers -- and almost half of younger boomers in their 50s -- have already paid off their mortgage.

About two-thirds of retirees have either already moved, or plan to move, and most of them are downsizing to a smaller home. But there is a significant countertrend. Some 30 percent of boomers say they intend to move to a bigger house -- large enough for their children to visit with the grandchildren, or sometimes to accommodate an adult child who lives with them.

And while some 40 percent of retirees and preretirees expect that they will move to a different part of the country, that still leaves 60 percent of us who will stay close to home. We love our homes and our neighborhoods. Our families live nearby, and we want to stay close to old friends. For there's one thing we all know, no matter where we live: The older we get, the less we think about our home as a financial asset, and the more we prize the emotional benefits that it gives us.

Tom Sightings blogs at Sightings at 60.