Baby Boomers Start to Ponder Retirement
The first generation of boomers is turning 60, and many are giving serious thought to where they’ll retire. Several things can be said about this coming wave of Americans:
- There are lots of them.
- Many happen to be rather wealthy.
- Most will face a vast array of options.
This is a milestone year for the baby boomers, defined as the populous group born from 1946-1964. Three million of them are about to turn 60. Although few have retired yet, many are giving it serious thought.
“Retirement is in the midst of a rather extraordinary transformation. Boomers will cycle in new directions,” says Ken Dychtwald, co-author of The Power Years, a book that includes advice for older people about choosing where (and how) to live.
Given the tremendous power of boomers to sway the Florida housing market, Dychtwald foresees a proliferation of retirement options for people on all rungs of the economic ladder. These will be as diverse and eclectic as the people themselves.
Stan Hinden, author of How to Retire Happy, has two words of advice for you if you’re in this situation: Plan ahead!
Sage advice, as with any Florida mortgage loan or home purchase investment. Here are several pieces of advice for those beginning their search for the right retirement community:
– Consider the consequences of retiring to that dream faraway location. Many people are actually starting to sell their single-family homes on suburban cul-de-sacs in favor of senior-driven condo developments just a few miles away.
Many couples have good reasons to remain in the region where they’d lived for much of their life, if their children reside in the vicinity, and they have deep roots there. Tempting as Florida might be to the northerners, it could be too isolated if they’re from far away. Or if you’re a native South Floridian, escaping the high home prices might not be worth it if you feel strong ties to the area.
Financial considerations play a huge role in people’s quality of life after retirement, but too many retirees seeking a lower-cost area in a faraway place fail to realize the personal implications.
In most respects, Hinden and his wife are pleased with the compromise they made in terms of location. When they left their five-bedroom single-family home for a two-bedroom condo, they shed many maintenance responsibilities. They’ve made many new friends in the senior living complex, yet are still able to see folks they’ve known for years who reside in the same area.
– Question the concept of moving to an “age-segregated” community. By and large, Hinden and his wife are happy with their choice of a seniors-only community, but there are also a few drawbacks. One is that a community populated solely by seniors has a dishearteningly high death rate.
Dychtwald, CEO of Age Wave, a demographic consulting firm, says only a small minority of boomers say they’d prefer to live in an age-segregated community when they retire.
“Many people are more comfortable in a multi-generational neighborhood,” he says.
– Position yourself in a place with employment opportunities. As Dychtwald notes, the common U.S. age for retirement has been 64. But he predicts that many baby boomers will continue working beyond that point, due to personal choice, necessity or a combination thereof.
“After taking a sabbatical to clear their minds and recharge the batteries, many will re-enter the workforce. Work is engagement, and the baby boomers want to stay in the game,” he says.
Boomers who choose to keep working, if only on a part-time or six-month-a-year basis, should take these plans into account when considering a housing move.
– Don’t overspend your budget for housing. Obviously, your income and assets will be critical factors in determining your retirement options. But many people underestimate how costly it can be to pursue the sort of retirement they have in mind.
Perhaps you’ve paid off your Florida home mortgage and plan to stay in your current home. Even so, will you have the means to comfortably cover ever-rising utility bills, taxes, property insurance along with the repairs on the place after you’ve left your current job? Would a dream retirement home cost you even more?
Many people, including those with ambitious retirement plans, mistakenly think they can retire well on less money than they spent during their working years. In fact, they’re likely to need more — especially if they want to pursue expensive hobbies, such as foreign travel. As much as that beachside vacation home calls to you, consider its practicality.
