Did everyone have a nice day off? Great, let’s get back at it! From John Burns:
More people were born in the 1950s (41 million) than in any other decade, and they are dropping out of the workforce in droves. Those born in the 1950s will begin turning 65 in 2015. In fact, in the last 10 years, we have transitioned from roughly 2.5 million US residents per year turning 65 to 3.5 million per year, and that number will trend up to almost 4.5 million by 2025 before it starts trending down again.
This seismic shift will have a huge impact on the economy, as the traditional working age population of 20-64 will transition from growing 1.0 percent per year for decades to growing 0.25 percent per year. 20- to 64-year-olds earn and spend the most, so you can almost guarantee that the economy will grow more slowly than it has in the past.
While the economic growth will be slower than usual, and the burdens on Social Security will skyrocket, entrepreneurial opportunities will abound to serve an unprecedented surge in retirees who, by the way, also happen to be the most affluent retirees ever.
My big idea for 2015 is to plan for a slower growing pool of workers and to take advantage of the surge in retirees, no matter what your business.
Here is a nice clip from CNBC discussing the success home builders are having targeting retirees, even in non-traditional retirement markets such as Atlanta:
We keep hearing how the Boomer’s don’t have enough to retire (which is IMO for the most part wrong, and no generation really ever was ready for retirement it just kind of happens).
I from what I have seen the boomers will continue to work as long as they are able to. (Me I plan on never completely retiring).
John’s point is that as more of the affluent boomers scale down their spending, the economy should feel it: “Plan for a slower growing pool of workers and to take advantage of the surge in retirees”.
You’ve heard it here regularly that boomers may want/need to sell their house to survive, downsize, or enjoy a nomadic lifestyle.
You and I know that most of the people around here aren’t moving – young or old. I focus on those who might!
I’ll bet there are quite a few retirees looking to downsize with a budget between $500K and $1M with more amenities….especially in Cali.
I agree and the biggest hurdle in downsizing is want vs need – you have to NEED to downsize to be willing to move to an inferior home.
It doesn’t NEED to be an inferior home if you are willing to leave town. It’s the juggle – how to fund a suitable home in suitable location. In SD we are are fortunate to have LA and SF be more expensive and so close that they can downsize here. But that’s about it.
Several of my late-boomer contemporaries have said “Basta!” to the crowds, expense, traffic, and stress of coastal North County. They’re profit-taking, selling their coastal pads and moving to Rainbow, De Luz, Pauma Valley, Julian, Warner Springs. They are working from home or retired, and buying older, high quality owner-built custom homes for less then half of coastal cost–in many cases cashing them out.
The drive times and lack of services matter less when you don’t have to commute. They do surgical strike missions to the beach on the best, least-crowded weekdays, then retreat to a great near-wilderness life in the coastal foothills and mountains. This allows them to stay in SD county, relatively close to friends and family.
Not for everyone, but I see the merits. Coastal NC as they knew it in the 60s, 70s, and 80s sort of isn’t there anymore. Instead of complaining, they are busting what looks like a pretty artful move.
According to Calculated Risk, the prime working age group will start growing again after 2020 (http://www.calculatedriskblog.com/2014/06/census-bureau-largest-5-year-population.html) so I would not put too much stock into a “seismic shift.”
Also, boomers should be cautious about moving out into the boonies away from major medical centers. Advanced medical care will probably become increasingly important in late retirement years.
Too true, Ross. But in the examples of Rainbow and Pauma, you’re talking 25 minutes to Palomar Medical Center. Not quite a Lewis and Clark expedition.
We’ll see how they do. I’ll monitor their semi-rural program as I chew off my fingers at the 5/805 split. Factor in the stress from my outsized mortgage and I REALLY need to be close to good health care.
What I’m seeing in business is that the boomers just won’t retire. (not that I blame them) This keeps the money flowing.
MB Mike sent this in:
For us, it’s more of a WANT vs NEED. We are initially downsizing a bit into a condo with pools/rec area/gym close to our current home/friends/shopping. This will provide us with the ability to travel (just lock and go). Renting the place we’re in now initially but I’m guessing we’ll probably sell it in time just in case we find something really cool while traveling. May end up having a few places (Costa Rica, Italy, New Zealand, etc) we can hit for 2-3 months at a time (via VRBO?) until the wheels fall off.
We’re looking at the travel aspect as an opportunity to check out other places where we may end up in the long term….note the high level of long term care in other countries.