Baby boomers’ concerns about finances in their senior years hit home with a recent poll that found few believe it will be economically feasible for them to move, an ironic development for a generation that is in part defined by how it broadened horizons.
More than half (52 percent) of boomers polled said they are unlikely to move someplace new in retirement, according to an Associated Press-LifeGoesStrong.com survey conducted in October. Four in 10 said they are likely to stay in their current home throughout their retirement, while nearly half of older baby boomers (48 percent) say it is extremely likely they’ll stay in the home they live in now throughout their retirement, compared with just over a third (35 percent) of younger boomers.
Midwestern and rural baby boomers are also more inclined to stay put, while higher-earning boomers who make more than $100,000 a year are more likely to purchase a second home during retirement, the poll found.
The “Easy Rider” generation finds itself rooted in place due to the housing market’s woes. Millions of homeowners owe more on their mortgage than their homes are worth and cannot movie without incurring significant losses, a phenomenon that economists Colleen Donovan and Calvin Schnure call the “lock-in” effect.
Shelley Wernholm, a 47-year-old single mother of two, is representative of the challenges boomers face in planning for retirement. She told the AP that she had intended to retire and movie to a new home by the age of 60, but her pension was eliminated five years ago, her personal investments were devastated by the recession, and her home of 21 years has lost more than half of its value,
The AP-Lifestrong survey finds that this will be a boon for the remodeling industry. Nearly half of empty nesters (47 percent) have converted their children’s rooms to other uses, while 58 percent have transformed newly spared rooms into a guest bedroom. Nearly 40 percent have created home offices, while more than a quarter (28 percent) have set up craft rooms.
Nearly two-thirds of these Mass Affluent households are concerned about having enough money set aside for retirement, while 56 percent fret about being able to retire as planned, according to a a 2011 wealth level conducted by Millionaire Corner of households with a net worth between $100,000 and $1 million (not including primary residence). The collapse of the real estate market has been particularly unsettling to boomers who may have been counting on financing their retirement years by selling their home, our study found. Forty-four percent said that the big takeaway from the prolonged economic downturn is that their primary residence is not a stable financial asset. Of these, more than half (52 percent) were seniors 65 and over and 46 percent were boomers ages 55-64.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.