By Marc Miller
(Reuters) - The baby boom
generation has broken the mold at every stage of life, and it looks like old
age won't be any different.
Boomers aren't heading quietly into
retirement. They're launching businesses, embracing digital technology and
living abroad in greater numbers than ever before. But in other ways they are
struggling more than the previous generation.
Here is a look at trends shaping
the next wave of retirement.
THEY ARE LEAVING THE U.S.
More older Americans are packing it
in for foreign countries, where they can save on living costs and enjoy warmer
climates.
The number of retired workers,
spouses and survivors getting Social Security benefits in a foreign land is
rising almost twice as fast as the number of Social Security beneficiaries
generally, according to Social Security Administration data.
And 21 percent of baby boomers say
they are "interested or very interested" in retiring abroad,
according to a survey by the Center for Medical Tourism Research at the
University of the Incarnate Word in San Antonio, Texas.
"If that were extended across
all boomers, you'd have about 3 million people retiring abroad in the next
couple decades," says David Vequist, the center's director.
THEY ARE STARTING COMPANIES
Almost a quarter - 21 percent - of
new U.S. businesses started in 2011 were launched by entrepreneurs age 55 to
64, according to the Kauffman Foundation, up from 14 percent in 2007.
Entrepreneurs age 45 to 54 accounted for an additional 28 percent of the 2011
startups. Taken together, that's 49 percent of all startup activity - far
larger than the 20- to 34-year-old bracket, which accounted for 29 percent of
new ventures.
In part, the surge can be
attributed to the 2008 recession, which sent older workers into consulting gigs.
However, there are a surprising number of complex, sophisticated and large
businesses being created as well, according to Dane Stangler, director of
research and policy at the Kauffman Foundation. He also thinks many of these
older business owners are "serial entrepreneurs."
"We're seeing a lot of
entrepreneurs in fields like technology and engineering
who are launching substantial businesses," he said. "They started
companies in their thirties or forties, and now they're doing it again."
THEY ARE TECH SAVVY
Young people might be leading the
digital revolution, but boomers - the generation born 1946 to 1964 - aren't far
behind.
"Baby boomers got quite comfortable
with the Internet and other digital technologies in the workplace," says
Lee Rainie, director of the Pew Internet Project. "They won't give that up
as they age."
For example, 23 percent of older
boomers and 27 percent of their younger siblings use tablet devices, compared
with 30 percent of Gen Xers (born 1965 to the early 1980s), according to the
Pew Internet Project. The gaps also are small when it comes to smartphones and
social networking services.
"They're not going to be
downloading every new app that catches the crowd," he says. "They're
very utilitarian - show me how it will work for me, how it will improve my
life." Expect retiring boomers to publish creative works online, connect
with friends and children via social media and continue to job-hunt on sites
such as LinkedIn.
THEY ARE BORROWING MORE
Older Americans are taking more
debt into retirement than previous generations. Mortgage debt is the biggest
factor: Forty percent of homeowners over age 65 had mortgage debt in 2010,
compared with just 18 percent as recently as 1992, reports the Joint Center for
Housing Studies at Harvard University (JCHS).
The culprit: the refinancing boom
before the housing crash. In the years leading up to 2008, homeowners took
advantage of low rates and deductibility of interest to refinance, says Lori
Trawinski, senior strategic policy adviser at the AARP Public Policy Institute.
"(They) took out equity for
things like education or a new car," says Trawinski. Boomers on the cusp
of retirement are still refinancing, sometimes at the behest of their financial
advisers, because of the appeal of today's near-record-low interest rates.
Higher debt levels will have a
variety of effects. Some retirees will be stuck in homes with underwater
mortgages or monthly mortgage payments that sap their spending power; others
will use low-interest mortgage debt to keep more cash on hand or to keep other
money invested longer.
THEY ARE OUTLIVING THEIR
EXPECTATIONS
Life expectancy for men has jumped
an average of almost two years in each of the last five decades, to 75.7 years
in 2010, according to the Society of Actuaries. For women, life expectancy has
risen by 1.5 years, on average, to 80.8 years.
Yet more than half of older
Americans haven't gotten the memo. A Society of Actuaries survey of 1,600
adults age 45 to 80 found 40 percent underestimated their likely average
longevity by five years or more; 20 percent were too pessimistic by two to four
years.
"That means there's a 50
percent chance you'll live longer," says Cindy Levering, an actuary and
co-author of the report. "If you make it to 90 and only planned and saved
enough for 85, you may not have enough to live on."
The odds that will happen are
pretty good. For a couple with above-average health, there's a 60 percent
chance one of them will live to age 90, the Social Security Administration has
reported.
THEY ARE PROVIDING FINANCIAL
SUPPORT
Some 58 percent of boomers are
providing financial assistance to aging parents, such as helping them purchase
groceries or pay medical and utility bills, according to an Ameriprise
Financial survey of just over 1,000 Americans conducted in late 2011.
When it comes to their kids,
boomers are even more ready to help out. Almost all boomers surveyed - 93
percent - say they have given their children a hand. A majority have
"boomerang kids" who have moved back home to live rent free (55
percent) or afford a car (53 percent).
But only one-third believed that
supporting adult children was making it more difficult for them to reach their
retirement goals.
"They're not connecting the
dots," says Suzanna de Baca, vice president of wealth strategies at
Ameriprise Financial. "They may not be taking money out of their
retirement accounts to help their kids, but the assistance is coming out of
funds that otherwise could be additional savings."
THEY AREN'T RUNNING TO FLORIDA
Boomers aren't embracing the
Florida-Arizona axis of retirement to the extent their parents did. Counties
known as retirement havens slowed their annual population growth to 1.7 percent
from 2007 to 2009, compared with 3.1 percent between 2000 and 2007.
Instead, the Urban Land Institute
(ULI) found that the metro areas with the fastest-growing population of 65-plus
residents include locations in North Carolina, Texas and Nevada, as well as
Colorado, Idaho and Georgia.
Boomers are attracted to
communities with large universities and affordable housing, says John McIlwain,
senior resident fellow for housing at ULI and author of the report.
The biggest draw affecting
relocation? The kids.
"If you want to find out where
a boomer couple will be moving to, find out where their oldest daughter lives.
It's the pull of the grandkids."
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