I just read an article by Mark Miller that seems to confirm some thoughts we’ve been having about how Baby Boomers are rethinking retirement / financial independence. Here are some of the high points of that article:
They are leaving the U.S.: 21% of boomers polled say they are interested in retiring abroad where they can reduce lifestyle needs and enjoy warmer climates.
They are starting new companies: 21% of new U.S. businesses started in 2011 were launched by entrepreneurs age 55 to 64 (up 14% from 2007). Entrepreneurs age 45 to 54 accounted for another 28% of the 2011 startups. Add them together and boomers started almost 50% of all new businesses in 2011.
They are borrowing more: 40% of homeowners over age 65 had mortgage debt in 2010, compared with only 18% in 1992. One of the reasons is the extremely low interest rates available. No sense paying down / off a 3% mortgage if you can earn 6% to 9% in a broadly diversified, balanced investment portfolio over time.
They are outliving their expectations: Life expectancy for men has jumped an average of almost 2 years in each of the last 5 decades to 75.7 years in 2010. For women, life expectancy has risen by 1.5 years on average to 80.8 years. For a couple with above- average health, there’s a 60% chance one of them will live to age 90.
They are providing financial support: 58% of boomers are providing financial assistance to aging parents while 93% of those polled say they have given their children financial assistance as well.
They aren’t running to Florida: Boomers aren’t embracing the Florida / Arizona retirement homes as they once were. The reason they’re not relocating? The pull of being near their children & grandchildren.
How are you rethinking your eventual financial independence? We will have more discussion on this topic in our next blog.