The 76 million Americans born between 1946 and 1964 changed the world.By the baby boom's end, the group accounted for 40 percent of the country's population where their arrival made an almost immediate economic and cultural impact.The rapid influx created an unprecedented demand for consumer goods that helped spur a long-lasting boon. The sale of everything from appliances to rock-and-roll records allowed businesses to thrive and wages to increase. More disposable income furthered consumer demand and generated an upward economic spiral that raised the standard of living throughout the country and abroad. Meanwhile, beyond an economic windfall, the generation ushered in cultural and social changes that defined the second half of the 20th century.
Since 2012, more than 10,000 Americans a day pass the retirement threshold of 65 years.In that short period of time, the so-called "me-generation" has already redefined golden years. The group is living longer, leading more active lifestyles and fostering innovation across a variety of industries. As this cohort continues to age into retirement for the next 15 years, it is once again poised to change the world.
To help pre-retirees and retirees prepare for the road ahead, American Equity is taking a closer look at some of the country's largest market sectors, which account for the top retirement expenses among American retirees. Throughout we find examples of new retirement trends driven by boomers' search for late-life luxury.
Retirement Expense: Housing
Housing leads the retirement expense list, costing retirees 33 percent of their average annual spending.As a result, the housing industry is primed for one of the economy's most significant transformations. The 65-plus population, set to balloon 90 percent by 2040, brings with it a seismic shift in retirement living expectations which are fostering innovation to align with boomer priorities.
Retirement Trend: Like-minded Communities
Niche, or affinity, retirement communities are one of the biggest trends in retirement living. These attract those over 55 who want to be in communities with likeminded individuals who share a common cultural or leisure interest. From a billion-dollar Jimmy Buffet Margaritaville-themed community in Florida to a star-gazers' paradise designed for retired astronomers, these outside-of-the-box solutions are proving to be big draws to boomers looking for active, engaging and walkable neighborhoods. Another break in tradition is their location. New communities are now integrated into larger, established communities or cities, whereas more traditional retirement villagers were isolated and established outside of existing developments.
Retirement Trend: "Halfback" Retirement
The traditional migratory pattern of "snow birds" to warmer climates, like Arizona and Florida, may be losing ground with boomers. Recent retirees seeking a more active lifestyle are finding options in more rural settings. These "halfback" retirees are moving halfway back from places like Florida and settling in the Mid-Atlantic and Appalachia regions. According to a recent Wall Street Journal article, net migration to retirement-destination counties throughout Georgia, North Carolina, and Tennessee has increased 169 percent between 2010 and 2017. This can also be seen as a part of a larger shift toward rural retirement, which is drawing interest from retirees looking for wide open spaces, interstate travel ease, and more affordable housing options for settling down and/or downsizing.
Retirement Trend: Renter-ment
The senior rental market is on the rise. Within the last 10 years, the number of renters over 55 increased 28 percent. This shift is largely on account of older Americans wanting to age in place with the conveniences and activity options that urban living offers. In major metropolitan areas, retirees can easily access theatres, museums, restaurants, doctors and grocery stores.
These types of benefits have found wide appeal with a new generation, and it has many swapping mortgage payments for rent checks.
One Size Does Not Fit All
These few examples represent only a small slice of this generation. Every retirement is different, with its unique goals and needs. Whether selling or staying in the homes where they raised their children, or forging new ground for the retired lifestyle, a sound financial foundation is fundamental for pursing any option. These trends highlight the breadth of boomer ingenuity that is upending retirement housing, as well as a variety of other industries. As the generation that once powered a youth movement navigates seniority, protecting their hard-earned dollars and ensuring guaranteed income will be paramount as they continue to change the world.
Don't miss more in our retirement series, including retirement trends in transportation and health care and retirement income needs.
The content is provided for informational purposes only and does not constitute advice. For specific details on how this may apply to your personal situation, contact your personal financial advisor or insurance agent for more details. American Equity contracts are only sold through independent agents. Please contact your state insurance department to see if there is an independent insurance agent in your area appointed to sell American Equity annuity contracts.
American Equity Investment Life Insurance Company® does not offer legal, investment, or tax advice. Please consult a qualified professional.