It’s safe to say that most of the talk in today’s real estate industry is focused on millennials. But some compelling stuff is happening among Baby Boomers, still the largest percentage of homeowners and a group that is nearing—or reaching—retirement age in greater numbers every day.
PropertyShark.com conducted a generational survey and found that, overall, boomers are woefully underprepared for retirement, and many are experiencing financial difficulties that could put their homes at risk. The report is a jumping-off point that can provide insight into this critical portion of the population, especially as it relates to real estate and personal finance.
Among their key takeaways:
• “3 out of 5 (Boomers) have less than $100,000 saved for retirement; only 4% have more than $1 million set aside.
• Nearly one-third have struggled to keep up with housing costs in the past year.”
According to a Vanguard report, 45% of Boomers have no retirement savings. Perhaps not surprising given that financial uncertainty, “Close to 1 in 3 older adults don’t plan on ever fully retiring.”
The good news is that “approximately 60% of those older than 65 are living mortgage-free, and Boomers are expected to pass on around $48 trillion in assets in the next 25 years,” they said.
The study also found that “more than half of those 45 and older want to remain in their current homes for their senior years,” which jives with a recent Chicago Tribune story. “Baby Boomers, the 75 million Americans born between 1946 and 1964, are clogging up the housing market,” said HousingWire of the article. “Instead of moving to retirement communities like many of their parents did when they got older, Baby Boomers are opting to age in place. The “near-gridlock” is keeping about 1.6 million houses off the national market, the Tribune story said, citing a Freddie Mac analysis.”
A significant portion of Boomers own their homes—76%, according to a study by Chase—and intend to hold on to them. Part of the appeal of paying off their home, aside from living mortgage-free, is being able to pass it down to family members. Interestingly, though, some of the changes they are making to their homes to make them more comfortable for advancing age may not be attractive to those who stand to inherit the places. Talk about a generation gap.
“An older bathroom retrofitted with grab bars is rarely what Millennials dream of, said The Tribune. Senior move consultant Pat Keplinger agreed. “The grandkids don’t want their grandparents’ houses,” Keplinger told HousingWire. “The kids have their own style.”