3/13/2013 1:45 PM ET|
7 ways boomer retirees are different
They're more likely to consider living overseas, start a business or still have a mortgage than the generation before them, for starters.
The baby boom generation has broken the mold at every stage of life, and it looks as if old age won't be an exception.
Boomers aren't heading quietly into retirement. They're launching businesses, embracing digital technology and living abroad in greater numbers than ever before. But in other ways, they are struggling more than their parents' generation.
Here is a look at trends shaping the next wave of retirees.
They are leaving the US
More older Americans are packing it in for foreign countries, where they can save on living costs and enjoy warmer climates.
The number of retired workers, spouses and survivors getting Social Security benefits in a foreign land is rising almost twice as fast as the number of Social Security beneficiaries generally, according to Social Security Administration data.
And 21% of baby boomers say they are "interested or very interested" in retiring abroad, according to a survey by the Center for Medical Tourism Research at the University of the Incarnate Word in San Antonio.
"If that were extended across all boomers, you'd have about 3 million people retiring abroad in the next couple decades," says David Vequist, the center's director.
They are starting companies
Twenty-one percent of new U.S. businesses started in 2011 were launched by entrepreneurs ages 55 to 64, according to the Kauffman Foundation, up from 14% in 2007. Taken together, that's 49% of all startup activity -- far larger than the 20- to 34-year-old bracket, which accounted for 29% of new ventures.
In part, the surge can be attributed to the 2008 recession, which sent older workers into consulting gigs. However, there are a surprising number of complex, sophisticated and large businesses being created as well, according to Dane Stangler, the director of research and policy at the Kauffman Foundation. He also thinks many of these older business owners are "serial entrepreneurs."
"We're seeing a lot of entrepreneurs in fields like technology and engineering who are launching substantial businesses," he said. "They started companies in their 30s or 40s, and now they're doing it again."
They are tech-savvy
Young people might be leading the digital revolution, but boomers -- the generation born 1946 to 1964 -- aren't far behind.
"Baby boomers got quite comfortable with the Internet and other digital technologies in the workplace," says Lee Rainie, the director of the Pew Internet & American Life Project. "They won't give that up as they age."
For example, 23% of older boomers and 27% of their younger siblings use tablet devices, compared with 30% of Gen Xers (born 1965 to the early 1980s), according to the Pew Internet Project. The gaps also are small when it comes to smartphones and social-networking services.
"They're not going to be downloading every new app that catches the crowd," he says. "They're very utilitarian -- show me how it will work for me, how it will improve my life." Expect retiring boomers to publish creative works online, connect with friends and children via social media and continue to job-hunt on sites such as LinkedIn.
They are borrowing more
Older Americans are taking more debt into retirement than previous generations. Mortgage debt is the biggest factor: Forty percent of homeowners older than 65 had mortgage debt in 2010, compared with just 18% as recently as 1992, reports the Joint Center for Housing Studies at Harvard University.
The culprit: the refinancing boom before the housing crash. In the years leading up to 2008, homeowners took advantage of low rates and deductibility of interest to refinance, says Lori Trawinski, senior strategic policy adviser at the AARP Public Policy Institute.
"(They) took out equity for things like education or a new car," says Trawinski. Boomers on the cusp of retirement are still refinancing, sometimes at the behest of their financial advisers, because of the appeal of today's near-record-low interest rates.
Higher debt levels will have a variety of effects. Some retirees will be stuck in homes with underwater mortgages or monthly mortgage payments that sap their spending power; others will use low-interest mortgage debt to keep more cash on hand or to keep other money invested longer.
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They are outliving their expectations
Life expectancy for men has jumped an average of almost two years in each of the past five decades, to 75.7 years in 2010, according to the Society of Actuaries. For women, life expectancy has risen by 1.5 years, on average, to 80.8 years.
Yet more than half of older Americans haven't gotten the memo. A Society of Actuaries survey of 1,600 adults age 45 to 80 found 40% underestimated their likely average longevity by five years or more; 20% were too pessimistic by two to four years.
"That means there's a 50% chance you'll live longer," says Cindy Levering, an actuary and co-author of the report. "If you make it to 90 and only planned and saved enough for 85, you may not have enough to live on."
The odds that will happen are pretty good. For a couple with above-average health, there's a 60% chance one of them will live to age 90, the Social Security Administration has reported.
They are providing financial support
Some 58% of boomers are providing financial assistance to aging parents, such as helping them buy groceries or pay medical and utility bills, according to an Ameriprise Financial survey of just over 1,000 Americans conducted in late 2011.
When it comes to their kids, boomers are even more ready to help out.
Almost all boomers surveyed -- 93% -- say they have given their children a hand. A majority have "boomerang kids" who have moved back home to live rent-free (55%) or afford a car (53%).
But only one-third believed that supporting adult children was making it more difficult for them to reach their retirement goals.
"They're not connecting the dots," says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. "They may not be taking money out of their retirement accounts to help their kids, but the assistance is coming out of funds that otherwise could be additional savings."
They aren't running to Florida
Boomers aren't embracing the Florida-Arizona axis of retirement to the extent their parents did. Counties known as retirement havens slowed their annual population growth to 1.7% from 2007 to 2009, compared with 3.1% between 2000 and 2007.
Instead, the Urban Land Institute found that the metro areas with the fastest-growing population of 65-plus residents include locations in North Carolina, Texas and Nevada, as well as Colorado, Idaho and Georgia.
Boomers are attracted to communities with large universities and affordable housing, says John McIlwain, senior resident fellow for housing at the institute and author of the report.
The biggest draw affecting relocation? The kids.
"If you want to find out where a boomer couple will be moving to, find out where their oldest daughter lives. It's the pull of the grandkids," he said.
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AGE discrimination trumps any other.............regardless of race, religious beliefs, sexual preference, political persuasion, etc,.................when you get "old".........(like me) you become one of........ "them"..............
Politics is the major reason we go where our money goes farther. The politicians raided Social Security fund then spent it on many useless projects simply to get themselves reelected. Now they borrow one third of the budget for the same thing. They will bankrupt the nation and blame it on the other party.
My ex will tell you I am the luckiest SOB on the planet. Luck is how a lazy person explains how someone who worked there A$$ off became successful. Yes it takes a certain amount of money to make money. But if I can start with nothing and build it into something so can you. I’m not wealthy but I can live somewhat comfortably for the rest of my life because I was willing to sacrifice for years to get here.
Regardless of age, when a country re-elects a president that did not live up to "his promises," many [not all] across all age groups will suffer. I still cannot understand why anyone would re-elect someone that proved they are not qualified for the job. This defies reason and logic....and is not what many deal with in the real world. If you do not perform on the job and do not meet performance requirements, you get fired (even if the requirements are not always realistic). So, why give Obama (and Joe) any special treatment? Or anyone else for that matter. Oops.....sorry.....i get it.....they voted on ideology and race.
The main reason to consider moving out of the USA for retirement is simple....I can't afford the ridiculous cost of medical insurance and treatment. In most countries, you get your insurance from a hospital corporation. I read an article stating that in Uruguay, you can get medical insurance at my age (57) for $200-300 per month. This is a world class hospital, many of the doctors trained here in the US. The pharmaceutical companies and big hospital corps. coupled with lawyers and malpractice are pricing medical care out of reach... and it's only going to get worse with Obamacare. The baby boomers as retirees are going to be "insurance poor" even with Medicare. The Medigap policies and long term care are unaffordable. My father just went in to full care at a cost of $5800.00 per month. How sustainable is that t a society? He worked hard and can afford it. In the next room over, the deadbeat who never saved a dime is a ward of the state. How fair is that? That's the problem with Obamacare and socialism in general, it rewards laziness.
One thing us boomers have going for us is a sense of history. We've seen that all great powers fall at one time or the other. They become selfish, complacent, and lose the sense of right and wrong. They become power hungry and cruel. Forget their own people. Point a finger at everyone else hoping no one will notice they are failing their own responsibilities as stewards of the world and the people God entrusted to their keeping. For this we are all, ultimately, responsible, because we have failed to fix our "broken" system.
So, HOW do we fix things? Perhaps, if we would all stand together on issues--recognize what's either right or wrong, not just WHO wants what when, and take moral responsibility for our actions, we could get back on track with the ideals our founding fathers had for us and the generations to come without punishing the very old or very young in our society. Everyone has value!
My parents always taught me that God gave us rules to guide us, then gave us free will in the hope we would choose to follow them. Unfortunately, we've "done our own thing" and rewritten the rules to suite us. Well, that isn't working, folks. Put "In God We Trust" back in our lives and government; make that government "of the people, by the people, and for the people," as it once was, live again for everyone.
Frankly, i cannot understand how employers are simply allowed to favor younger people for their new-hires. It is sickening and appalling that the American people put up with such crass and obstinate employment practices. I for one vote that we put a stop to it by forcing our government to re-institute new mandates that require companies to give fully-validated reasons as to why someone that is in the 50+ age group not be 'qualified' for any particular job.
I also venture to raise the point that banks be mandated to not just solely 'disqualify' business loan requests based entirely on ones credit score. Ha, ha, ha fat chance of that! LOL!
Just told my friends that I may have to go to South America or SE Asia to retire, hard decision since I'd like to get close to my kids and their families, assuming their spouses want me still :-).
But with rising health cost and tax rate, it's not a choice it's a necessity; not blaming the gov't but all, the white house, capitol-hills and CEOs of greedy companies need to wake up and smell the roses; if more Americans fleeing overseas:
1) Shrinking tax revenue (yes cause most countries has tax treaty with US which means the overall tax retiree needs to pay to uncle Sam will be less).
2) Fewer consumers to consume US goods and services at home
3) point 1 and 2, will likely snow-ball to more social benefits cut, putting more people in hardship eroding middle class further; remember a strong middle-class is what made US after WWII to be legitimate super-economy power in the world.
Greed and lack of wisdoms is not good for the better lack of words, it will kill the golden goose and left us with crap to look at, not preety for sure.
As the boomers move into either a planned, or forced retirement before they hit age 65 (as evidenced by the declining labor participation rates), many have restarted attempts at earning a livelihood to supplement their retirement incomes because of their lack of financial resources (see median net worth of those over age 65). They have become the current "squeeze" generation as they attempt to finance their parent's survival (due to their increased longevity outlasting their resources) and their children's (educational costs or support due to the poor job market and low wages).
The declining "natural population" is causing the decline of many areas and is expected to continue to do so as "natural birthrates" are low (also due to the poor job market and low wages).
We are a nation in decline which happens when there are fewer younger people replacing the retiring older generation. This happens as demographics shift because of the boomers moving through the aging process and distorts socioeconomic trends.
How the country solves this problem will be dependant upon it's ability to replace it's aging workforce, whether by allowing more immigration of foreigners, or encouraging more of it's own population to reproduce. Legislation affecting this trend will be a balance of encouraging new citizen formation against the needs of existing citizens.
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