“Baby Boomers Are Rethinking Retirement In A Major Way With Aging In Place Implications”

Ask a Baby Boomer (aka “Boomer”)  where they plan on living when they retire, how much money they think they need to retire, or what they’d like to do when they retire, and the answers may be surprising. Mostly, there is no retirement plan so all such questions are moot.

Where are Boomers planning on retiring? Aside from not actually calling it quits to a working life of some type – maybe not their current business or career – they are planning on staying in their current home. This is the classic definition of aging in place. They are staying put. They don’t need to move because they like what they have, and they are putting their energies into their businesses and professional lives. They are not moving to a tropical climate to retire. They are staying where they are – in the same home.

By focusing on maintaining their careers, businesses, or professions, Boomers are too engaged with that to consider actually retiring or moving. They may slow down a little, or they may maintain their current level of activity. They definitely are redefining retirement because they aren’t doing it. They may end one business and begin another. They may add some volunteer work into the mix, but not being employed in some income-earning capacity is not likely.

This blends into the second issue of how much money is needed for retirement. We see many ads on TV and online – as well as direct mail solicitations – about retirement planning and having enough money set aside in savings or investments so that a person doesn’t outlive their retirement money. Since formal retirement from a business or profession is not likely in the short term, if at all, having enough income saved up or invested to finance a long-term retirement is not practical or necessary. Boomers will continue to fund and largely pay their way for trips, home improvements, cars, entertainment, clothing, electronics, appliances, toys, sporting goods, and other lifestyle choices that have become part of their lives over the years with their earnings and not from their retirement savings.

Thus, the answers to the first two questions are that Boomers plan on living where they are now for the most part. They may move closer to children and grandchildren, but they’d have to find a new business opportunity there. They could do that as a second home and maintain their primary residence as well along with their primary business location.  As to the second question, many Boomers will not need any amount of money saved up for retirement because they still are going to be earning money and operating a pay-as-they-go program. They may dip into their savings for certain expenditures, but they will not be living a retired lifestyle.

The third questions about what Boomers will do in retirement is pretty much as they have been doing because they won’t really be retired. They may leave a position where they have been due to a mandatory retirement provision upon attaining a certain age (65 or 70, for instance) or not passing a rigorous physical to maintain what they have been doing (such as being an active airline pilot), but there still plenty of businesses open to them. Others will continue working where they have been and remain there well into the 70s and even longer.

It’s often been said that Boomers are redefining retirement, and this is how and why. They are not participating in the traditional retirement model of leaving a position they have held and then having free time to pursue other interests. However, their profession or their business is the interest that they want to continue pursuing – maybe at a reduced number of hours, perhaps not.

It remains to be seen whether the Boomer model for a long-term working career with its resulting income will catch on with younger generations (their children and grandchildren) or if this will be a uniquely Boomer phenomenon – just as saving resources (including money) and being frugal was a quality and characteristic of the Silent or Greatest Generation (the parents of the Boomers and those born immediately before the end of World War II).

It could be the new norm as we go forward, or the Generation Xers, Millennials, and Generation Z members may go a different direction entirely – more of the traditional retirement route, one that includes non-traditional employment such as telecommuting or online communication, or something else that we haven’t seen yet.

For now, Boomers are rewriting what it looks like to be retired (make that not-retired but of traditional retirement age) in America.

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