Two-thirds of retirees say they are living in the best home of their lives, according to “Home in Retirement: More Freedom, New Choices,” a new Merrill Lynch study conducted in partnership with Age Wave[1]. With newfound freedom unprecedented longevity, retirees today are more empowered to pursue a home that fits their desired lifestyle and changing priorities.

Achieving your best home in retirement requires careful forethought and preparation. You’ll need to consider a range of factors to get the most out of your home in retirement including:

• Future living priorities. Whether you decide to move or stay in your current home, carefully consider a range of priorities that will be important to you in future lifestages. These may include affordability, climate, proximity to family and friends, recreational or cultural activities, opportunities for continued work, access to good healthcare, etc. Look into trying out a potential area to live with extended visits or short-term rentals.
• Home-related expenses. Consider all expenses when forecasting potential home-related costs during retirement, including mortgage or rent payments; income, estate, and property taxes; insurance, relocation, utilities, repairs and maintenance. It is also important to consider whether you might want to renovate or remodel your home in retirement.

• Paying off a mortgage. Four out of five Americans age 65-plus are homeowners, and among them, 72 percent have paid off their mortgage. Assess whether you should pay off your mortgage before retirement. It can create greater financial security and peace of mind. But there are many factors – such as your risk tolerance, interest rates, taxes, estate planning, and other investment opportunities – that you should factor into this decision.

• Home size. Half of retirees didn’t downsize in their last move – and, in fact, 30 percent moved into larger homes. Don’t assume you will downsize your home in retirement. Moving to a smaller home can provide cash and reduce expenses, but you may find your current or even a larger home better fits your lifestyle and family needs in retirement.

• Long-term care. Prepare for long-term care, in case it is needed, by researching options that would enable you to receive care where you most prefer, whether you choose to move to supportive communities and housing or stay in your own home.

• Home modifications. Consider modifications and services that can empower you to remain in your own home if you face health challenges. Modifications like installing lower counters and tables, lever handles, bathroom safety features, and changing your living situation to avoid the use of stairs can make it easier to get around your home. Home care services and health monitoring and alert technologies can enable you to continue living independently as long as possible.

Where you live in retirement is more than just a financial decision, but it does have financial implications. Talk with your financial advisor about your housing options and preferences, and together you can develop a plan to bring those dreams to life. By considering these items now, you’ll be better prepared to live your best life in retirement.

Cyndi Hutchins, who wrote this article, is director of gerontology at Bank of America Merrill Lynch.