Baby boomers uncertain about retirement plans

Boomers are living longer and are different from previous generations, according to the survey of nearly 2,000 boomers, because they have no set path for retirement and have more varied circumstances in life.

“The differences from past generations – and between baby boomers themselves – will have a significant impact on housing needs over the next 10 to 20 years that is very different from the World War II generation, and many boomers simply don’t know how they’ll retire,” said David Lereah, NAR chief economist, in a news release.

Staying on the clock

A significant portion of boomers married later in life and had children at a later age, which means many will continue to work beyond the traditional retirement age, according to the survey.

Older boomers are thinking about retirement, but a third of them expect to go back and forth between periods of work and leisure. The median age at which boomers intend to stop working is 70, but 27 percent say they never intend to stop working.

Boomers also remain a driving force in the housing market. In the survey, 42 percent of respondents want to retire to the South, 32 percent to the West, 15 percent to the Midwest and 12 percent in the Northeast.

Purchasing power

Additionally, most boomers live in two-income households, with a median income of $64,700 in 2005 – 31 percent higher than the median for all households. Boomers make up 37.5 percent of U.S. households but receive nearly half of all aggregate household income.

“This translates into a lot of purchasing power, and helps to explain why eight out of 10 boomers are homeowners,” Lereah said.

The group also is diverse in its real estate holdings; a quarter 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 own a vacation home or seasonally occupied property, and 2 percent own commercial real estate.

One in 10 boomers also said they plan to buy some form of real estate within the next year; two-thirds are considering a primary residence, but the rest are thinking about second homes or investment property.

“Baby boomers expect professional service and guidance from real estate agents, and they value those services,” said NAR President Thomas M. Stevens, in the release.

“When buying a home, they want agents to represent their interests in the complex transaction process, and when selling they want help to establish the right asking price.

“Regardless of whether they’re buying or selling, boomers want agents to explain all of the complicated contracts, forms and agreements, to manage the closing process from start to finish, and to negotiate on their behalf.”

Not all good news

Three quarters of respondents said they are not financially prepared for retirement. Many said they might withdraw retirement funds for housing or real estate expenses.

When thinking about where to retire, half who live in an urban area would like to retire to a small town or rural setting, based on lower cost of living and better climate.

More than a third want to retire in an urban or suburban setting, motivated by quality health care and cultural activities. [[In-content Ad]]