Do you plan to retire? You would imagine that such a question is a “no-brainer” but that's not necessarily true. Each person will make that decision when the time comes based upon a myriad of factors such as health, family and/or the physical requirements of their job.
Life expectancy is rising, according to the Organization for Economic Co-operation and Development, a Paris based economic think-tank. This organization has determined that governments will not be able to pay retirement funds for individuals who, by the year 2050, are expected to live about 20 to 24 years beyond the current retirement age of 65.
The report, released on Monday, notes that, "Extending working lives in a situation of slowly growing or declining workforces should provide an important boost to economic growth in aging economies."
Looking ahead, how will changing the retirement age impact real estate, and will it make much of a difference? Let's see. Right now, experts are concerned that the baby boomers – typically better savers than younger generations – will face financial hardships during retirement.
Doubtful. Many of these individuals have 100% equity in their homes. They're willing to change their lifestyles to accommodate their needs during retirement. For example, as they begin to retire they sell their homes and move to more affordable locations such as Florida or Arizona.
According to the NY Times, Great Homes and Destinations writer, Fred Brock,
“Surveys among boomers who have retired early show clearly that college towns are a favorite because of their cultural and educational opportunities. Towns with strong, diverse economies are favored for the part-time jobs they offer. Also important are recreational opportunities, good restaurants and high-speed Internet connections, especially for those boomers who want to work from home.
The houses that many boomers will be building and buying also reflect a desire to downsize. “Many boomers are empty-nesters; big houses are all about kids,” said Blanche Evans, the editor of Realty Times. “There is a tremendous move toward condos and smaller, low-maintenance homes. The boomers want to pursue their own interests. They don’t want to spend time on home maintenance. They don’t want a trophy house. Many have done that already.”
Ms. Evans says many decorators are telling her that the boomers want to transform the style of their houses along with their lives, trading in a suburban house for an urban loft, for example. She added: “Baby boomers have always been experimental. That won’t change as they get older. They’re willing to go outside their comfort zones.””
What do you think? Please share your experiences as a real estate professional. Do you have any clients who have changed their lifestyles after retirement?