So Baby Boomer: Life Tips

Retirement in Poverty

Up to 20% of Baby Boomers will live in poverty after they reach age 65, roughly double the current proportion, unless there is a “substantial and sustained saving effort,” according to a study by the Securities Industry Association.

The study said the boom in housing prices over the past six years contributed to a continued decline in savings by giving a broad swath of Americans an inflated sense of their net wealth.

Roughly 50% of Americans aren’t saving at all, and two-thirds are not saving enough for a comfortable retirement, the study found.  It predicted that many Baby Boomers will be forced to postpone retirement, “perhaps indefinitely,” and sharply cut back on spending. 

In a telephone interview, SIA Chief Economist Frank A. Fernandez cited an urgent need for lower- and middle-income Americans to begin saving at least 3% to 5% of their income.  However, rising fuel prices and higher interest payments make such a prospect unlikely, he said.

Source: Pensions&Investments online, June 27, 2006, www.PIonline.com

Getting older and happier

A nationwide study, published in the Journal of Happiness Studies, used the Internet to ask people who were 20 to 40  years old and 60 and up which age group would be the happiest.

Most incorrectly thought younger people would be happier than older people, said Heather Lacey, lead author of the study by the Center of Behavioral and Decision Sciences in Medicine, a joint program of the University of Michigan and the VA Ann Arbor Health System.  "We are notoriously bad at predicting what's going to make us happy," Lacey said.  "Strong literature proves people grow happier as they age.  But people's beliefs are completely opposite.  Everyone relies on stereotypes."

Many who hear about the study still can't believe older people would be the happier population, said Peter Ubel, senior author of the study.  "They are wrinkly, arthritic, they can't jump as high as me, their opportunities are shrinking.  How could they possibly be happier?" Ubel said.  "But then you look at the MTV generation, where the smallest personal slight makes you go crazy.  It makes sense."

Source: The Ann Arbor News, June 25, 2006

What's most important?

When it comes to the success of their relationships, 84 percent of Baby Boomers rank sex as important or very important, a U.S. survey finds.

In fact, the number of boomers, in the survey by Harris Interactive of 2,000 married baby boomer men and women, rank sex as more important to a successful relationship than having enough money -- 72 percent -- or good health at 78 percent.

However, the survey also found that only 50 percent of boomers surveyed are satisfied with the physical intimacy in their relationship and 41 percent of men and 43 percent of women desire more emotional intimacy in their marriage.

"For a lot of boomers, sex is expected, anticipated, valued and an important part of life," said Dr. Joy Browne, a clinical psychologist and radio and television talk-show host. "Boomers want emotional and physical intimacy, yet many are unclear about what to do specifically when they don't have the happiness, success and closeness in the bedroom that they view as their birthright."

Baby Boomers are most likely to cite "being tired" as a barrier to sex, followed by stress and anxiety and work/job-related stress.

Source: United Press International, June 22, 2006

Real Estate Survey Results

Baby Boomers have a home-ownership rate higher than the national average, and one in four boomers owns more than one house, a recent survey shows.

Results of the survey of 2,000 Americans born between 1946 and 1964, conducted by Harris Interactive, were released last month during the mid-year meetings of the National Association of Realtors. 

Nearly eight in 10 boomers own their own homes; the Census Bureau puts the overall home-ownership rate at 69 percent.  Almost 90 percent of the boomers surveyed have owned property at some point, the Harris results showed, and almost 96 percent believe owning a home is a good financial investment.

One-quarter of those responding to the survey own one or more other kinds of real estate in addition to a primary residence: 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.

Though the Baby Boomer market remains a significant source of buyers for Realtors and builders, David Lereah, the association's chief economist, said marketing to this generation has been and can be a challenge.  "As a group, boomers are in their peak earning years and continue to wield great influence in the U.S. economy," Lereah said.  "But they are not homogeneous.  There are significant variances in needs, behavior, attitudes and resources."

While boomers appear to have "an almost insatiable desire" for real estate, many have not adequately planned for retirement, Lereah said.  "What should not be overlooked are the discretionary spending interests of this generation, and their appreciation of housing as a great investment," he said.

A Realtors association analysis 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.  For the boomer segment that owns rental investment property, 34 percent own more than one. Of those who own vacation homes or seasonally occupied property, 13 percent said they owned two or more of them.

Forty percent of the 2,000 survey respondents said they intended to make the vacation home or seasonal property a primary residence eventually.

Source: The Belleville News-Democrat, June 16, 2006 www.Belleville.com 

Many McMansions For Sale

The golden age of McMansions may be coming to an end.

These oversized homes--characterized by sprawling layouts on small lots, and built in cookie-cutter style by big developers--fueled much of the housing boom.  But thanks to rising energy and mortgage costs, shrinking families and a growing number of retirement-age Baby Boomers set on downsizing, there are signs of an emerging glut.

What's a McMansion?

The short answer is any home bigger and showier than your own.  More specifically it is a house larger than 5,000 square feet--about double the national average--with four or more bedrooms that is built along side similar houses.  Most have been erected since the mid-1980s.

Now, boomers in their late 50s are counting on selling their huge houses to help fund retirement.  Yet, a number of factors are weighing down demand.  With the rise in home heating and cooling costs, McMansions are increasingly expensive to maintain.  The overall slump in the housing market also is crimping big-home sales.  Meanwhile, the jump in interest rates has put the cost of a big house out of more people's reach.

Mickey and Jane Finn put their five-bedroom, 6,200 sq. ft. home in Leesburg, VA, on the market in April, but already they've cut the price and now they've decided to put it up for auction.  With their two children grown, they're eager to move to a place half the size.  "We don't need this big a house anymore--if we ever did," says Mr. Finn, age 63.

Source: The Wall Street Journal, June 16, 2006

Living and Playing Hard

Baby Boomers have always found time to live hard and play hard.  Now, many of them are paying the price in chronic joint pain.

Orthopedic surgeon Dr. Lyman Smith has many patients suffering Boomeritis.  Smith said the problem is the sports they love take a toll on the joints.  He recommends switching to sports that are easier on the knees like swimming or biking.  Smith also recommends strength training for the leg joints to help prevent injuries.  He said running may be good aerobic activity, but it does not strengthen the knee joint.

Trend-watchers say the generation that once believed "never trust anyone over 30" is now well over 50 but still determined not to grow old.

"I think we could roll up the whole reasoning into just one phrase — quality of life — because the feedback we get is that people simply want to be active in their later years, and they now realize that being fit is one of the only ways to do that," says Dean Witherspoon, president of Health Enhancement Systems, which creates health programs for corporations and other organizations.

More and more fitness centers are doing everything they can to attract the Baby Boom Generation — and it's working, with folks over 50 making up the fastest-growing segment of the fitness population.

Sources: www.WRAL.com, June 15, 2006 and Colette Bouchez, WebMD, www.FoxNews.com November 28, 2005

Home Remodeling

The $11 trillion in U.S. homeowner equity continues feeding the remodeling market.

Many Baby Boomers (aged 46-64) will be skipping the summer vacation to the Grand Canyon or Maine coast and focusing on a home project.   

According to the National Association of Home Builders' Remodeling Market Index, 91 percent of remodeling work is being completed by boomers.

The 78 million U.S. Baby Boomers are now in their peak earning years, accounting for 55 percent of American households with more than $100,000 in annual income. 

Boomers, who make up 37 percent of all homeowners, are retiring at such varied ages and they’re in no hurry to move.  When marketing to boomers, remodelers and builders should do away with language about “retirement,” and instead stress that their products and services allow buyers to be engaged and employed.

Shifting Assets

The closer people get to retirement, the more they shift their assets to less risky investments.  There is cause for concern when the Baby Boomers start switching their investments.

The impact of the Baby Boomer Generation’s aging and retirement is already raising concerns when it comes to health-care costs, employment and social security.  Add another reason to worry about the aging boomers: their impact on the stock market. According to research at the Olin School of Business at Washington University in St. Louis, retirees don’t invest as much as younger workers, which could mean a blow to Wall Street when boomers pull out of the workforce.

“When you have voluntary retirement age, as we do in the United States, people tend to invest more from an earlier age,” says Hong Liu, associate professor of finance at the Olin School of Business. “People are willing to take on more risk when they are younger. At that time in their lives they know that if their investments don’t pan out, they can always work longer in their lives to make up for it.”

However, the closer people get to retirement, the less risk they’re willing to take, Liu says.  By the time they retire, most people shift their assets to less-dicey investments.  That strategy is logical.  However, when millions of baby boomers follow that pattern, the impact on the stock market could be formidable.  Fewer people investing in the market means the market will weaken.

Source: www.NewsWise.com June 12, 2006

The Quest Continues

By the time the first Baby Boomers began entering the work force in the late 1960s, times were changing.

College degrees had become more prevalent. Women were seeking out careers that were once off-limits.  Industrial jobs were giving way to even more office work. And America's postwar fascination with materialism—look, there's another new car in the driveway of another newly built suburban home!—was on the wane.  When it came to work, Baby Boomers wanted something more than steady paychecks, predictable promotions and the gold watch.  Many wanted their work to be, above all, meaningful.

That quest continues today.

Boomers are a wide demographic: the oldest, at 60, are nearing the age when their parents probably thought about retiring, while the youngest, at 42, are just hitting the sweet spot of their careers.  Some are fantastically wealthy; some struggle in poverty.  But most have approached their working lives with a self-determination unlike any previous generation—and for many, that means starting a whole new career in midlife.  "There are tens of millions of people involved here, [asking], "What am I going to do with the rest of my life?' " says Richard Fein, author of "The Baby Boomer's Guide to the New Workplace."   

Not all these second career moves are voluntary: for many people nowadays, the journey toward a new career begins with the pain of a pink slip.

For the complete story from The Boomer Files at Newsweek, go to: http://msnbc.msn.com/id/13249472/site/newsweek/

Second Careers

After 24 years with Delta Air Lines, Nancy Stiefvater took an early-retirement package in the summer of 2001 but thought she still had "too much to offer."

Five years later, after a succession of temporary positions, she landed a dream job as a patient-services coordinator at Cincinnati Children’s Hospital Medical Center.

"It’s an opportunity to work with people in a top-flight organization," said Stiefvater, 56.

She credits her volunteerism and working retirement with helping her to find something that satisfies her — and cushions her financially.

In the ranks of the "unretired," Stiefvater is in good company: Eighty percent of Baby Boomers, according to a recent AARP survey, plan to work at least part time after retiring from their careers.

Efforts are under way in Washington as well as in Corporate America to allow for phased retirements, given the unprecedented graying of the work force — as 78 million boomers, born from 1946 to 1964, march on.

According to Bureau of Labor Statistics projections, the number of U.S. workers 55 and older will grow 4.1 percent a year until 2014 — or at four times the rate for the labor force as a whole.

Source: Scripps Howard News Service, June 9, 2006