Baby Boomers

Just when you thought it was safe to turn 55 with just a few friends around to notice, someone goes and surveys the baby-boom generation.

Someone like the National Association of Realtors, which commissioned a Harris Interactive survey of 2,000 members of that rather diverse group – the roughly 78 million Americans born between 1946 and 1964. Among the results:

• Most boomers are far from ready to retire.

• Their timelines and plans are as diverse as they are as a group.

• Their housing needs differ significantly from those of previous generations.

Baby boomers “are living longer and are different from previous generations because they have no set path for retirement and have more varied circumstances in life,” said the Realtors’ chief economist, David Lereah.

“The differences from past generations – and between baby boomers themselves – will have a significant impact on housing needs over the next 10 to 20 years that is very different from the World War II generation, and many boomers simply don’t know how they will retire,” he said.

Many boomers will work past traditional retirement age because they married and had children later than previous generations did, Lereah said. Older boomers are thinking about retiring, but go between leisure periods and part-time jobs.

Though most of those surveyed pointed to 70 as their retirement age, 27 percent said they would never retire.

“Just over a quarter of the boomer generation is aged 55 to 60, which is when many people traditionally begin to focus on their retirement plans,” Lereah said, “but analysis of the survey suggests they are more likely to stay in the workforce longer and will be less likely to downsize than previous generations – the leading edge of the boomer generation is the key to future housing impact.”

U.S. Census data indicate that most boomers live in two-income households, with a median income in 2005 of $64,700, 31 percent higher than the median for all households. This generation makes up 37.5 percent of U.S. households, census data say, but receives nearly half of all aggregate household income. Of baby boomers earning $100,000 or more, more than nine in 10 are homeowners. Among middle-income boomer homeowners, home equity accounts for fully half of their net worth.

Even so, 19 percent of survey respondents were renters, 37 percent said they had just enough to make ends meet, and 17 percent said they were having financial difficulty.

A quarter of baby boomers own one or more other kinds of real estate in addition to a primary residence, the survey said: 13 percent own land; 8 percent own rental property; 7 percent, a vacation home or seasonally occupied property; 2 percent, commercial real estate; and 3 percent, some other kind of real estate.

Four out of 10 respondents said they intend to convert their vacation home into a primary residence in retirement. Analysis by the Realtors’ group shows baby boomers are proportionately more active in the second-home market, owning 57 percent of all vacation/seasonal homes and 58 percent of rental property.

Ten percent of the boomers responding to the survey indicated they plan to buy some form of real estate within the next year, which corresponds with U.S. Census data that show 3.5 million boomer households moved during the last year. Two-thirds said they were considering a primary residence, but the rest were thinking about land, second homes, or commercial property.

Most survey respondents were unsure of their financial future, with three-quarters saying they were not financially prepared for retirement and many expressing anxiety about their ability to retire. Some boomers said they might withdraw retirement funds for housing or real estate expenses.

Peter Francese, an independent demographic-trends analyst and founder of American Demographics magazine, consulted on the findings.

“For the vast majority of baby boomers, retirement is somewhere off in the future,” Francese said. “Considering that boomers are healthier than their predecessors, and are more likely to work in an office setting, many of them may work five or 10 years beyond the traditional retirement age of 65.”

© 2006 FLORIDA ASSOCIATION OF REALTORS®

Posted by Donald Urschalitz P.A. at November 27, 2006 02:53 PM