How Baby Boomers will Reinvent Retirement
Sun 5th December 2010
The word Retirement has become a misnomer, says Greeff Developments' Heather Cape, why has just hosted the latest Retirement Options seminar at Riverside Gardens, Diep River, earlier this month.
"We had a full house at this seminar and are now planning our next forum, where the CPOA [Cape Peninsula Organisation for the Aged] will announce its decision to add care levels which have not been previously available for Riverside Gardens.
"We embarked on some further fact finding and came across a few interesting studies," says Cape.
According to a survey by Merrill Lynch, in an article called Reinventing Retirement, many baby boomers plan to keep working and earning money during their retirement years, but will alternate between periods of work and leisure.
The New Retirement Survey builds on the conventional wisdom that many baby boomers are not interested in pursuing a traditional retirement of leisure.
"Baby boomers fundamentally will reinvent Retirement," says James P. Gorman, President of the Merrill Lynch Global Private Client Group in a news release about the survey. “With (baby) boomers living longer and remaining engaged and employed beyond age 65, many of the traditional financial assumptions regarding retirement need to be reexamined.”
Baby Boomer Survey
Created with guidance from gerontologist and author Ken Dychtwald, Ph.D., The New Retirement Survey offers a preview of the different lifestyles, work styles and recreation activities that baby boomers envision for their future.
Here are highlights of the survey, from a news release by Merrill Lynch:
The new retirement "turning point." While 76% of baby boomers intend to keep working and earning in retirement, on average they expect to "retire" from their current job/career at around age 64, and then launch into an entirely new job or career.
Taking advantage of their "longevity bonus," baby boomers will create a whole new life stage. Since the time that Social Security established the "normal" retirement age at 65, life expectancy for a 65-year-old has increased by over seven years and continues to lengthen.
As a result of living longer, baby boomers plan to be "younger" longer and to work longer.
Most baby boomers who responded to the survey (65%) will stop working for pay and retire in the traditional sense at some point. However, that phase is more likely to begin in the late 60's than at age 60 or 65.
Baby boomers reject a life of either full-time leisure or full-time work. When asked about their ideal work arrangement in retirement, the most common choices among baby boomers in the survey would be to:
Repeatedly "cycle" between periods of work and leisure (42%)
Have part-time work (16%)
Starting their own business (13%)
Work full time (6%)
Only 17% of the baby boomers in the survey reported that they hope to never work for pay again.
It's not about the money. While 37% of the baby boomers in the survey indicate that continued earnings is a very important part of the reason they intend to keep working, 67% assert that continued mental stimulation and challenge is what will motivate them to stay in the game.
The transformation of the "me" generation into the "we" generation. The "me" generation has grown up — now with deep concerns for the well-being of their children, their parents and their communities.
Baby boomers are now 10 times more likely to "put others first" (43%) than "put themselves first" (4%).
The unpredictable cost of illness and healthcare is by far baby boomers' biggest fear. They are three times more worried about a major illness (48%), their ability to pay for healthcare (53%) or winding up in a nursing home (48%), than about dying (17%).
Baby boomer women are better educated, more independent, are simultaneously juggling more work and family responsibilities and are more financially engaged than any generation in history. According to the survey, married baby boomer women are more than six times more likely to share responsibility for savings and investments compared to their mothers' generation (33% now vs. 5% then).
Baby boomer women are dreaming of retiring to Mars while baby boomer men hope to retire to Venus. Baby boomer men are looking forward to working less, relaxing more, and spending more time with their spouse. Baby boomer women view the dual liberations of empty nesting and retirement as providing new opportunities for career development, community involvement and continued personal growth.
Financial preparedness is the gateway to retirement freedom and the antidote to retirement phobia. Accumulating the resources baby boomers believe they need for retirement freedom (81%), rather than age (56%) or any other variable, was cited as the most decisive factor for when they choose to retire. And recognising the growing uncertainty of government entitlements like Social Security, baby boomers who have a plan and feel prepared are twice as optimistic and far less fearful compared with those who do not.
One size does not fit all. When it comes to retirement dreams and preparedness, the survey found that there are five distinct and different baby boomer groups: Empowered Trailblazers, Wealth-Builders, Leisure Lifers, Anxious Idealists, and the Stretched and Stressed. The survey followed each group to determine how they are faring and what their plans are to meet their retirement goals.
Greeff Properties Developments' Heather Cape claims that the word Retirement has become a misnomer. "Many people no longer wish to retire”. Instead, they want to continue working and reinventing themselves. They require a place that offers them room to move around in, without worrying about the maintenance of the pool, giving up their dogs and certainly want to be free of the fear of break - ins. They want to lighten the load and concentrate on stimulating events and pastimes, be it travels, relaxation or work, all without being concerned about the upkeep and insecurity of living in large stand-alone homes.
"Many surveys and papers have been written up on the Baby Boomer Generation and now the baby boomers are coming into the Retirement property market. Significant numbers of these baby boomer retirees are expecting longer and healthier lives," says Cape. "Life expectancy for a 65 year old has increased to over seven years and is expected to lengthen."
According to another American survey, 76% of baby boomers intend to keep working and earning in Retirement. 67% maintain it's not for the money, but rather the mental stimulation and challenge. The biggest fear for baby boomers is the cost of Healthcare, in respect of major illnesses and winding up in a Nursing home. Says Cape, "Baby boomers that have a plan and feel prepared are twice as optimistic and far less fearful compared to those who do not.”All of this tells us that there are insufficient facilities for those that are not infirm or handicapped in any way, and want to cook for themselves as well as carry on working." Developments such as Riverside Gardens address these needs - to gain the security and freedom of truly living without stress and fear and living with like-minded neighbors. Then there is the vital reassurance that should health become an issue, Riverside has trained staff and facilities available to deal with this on a daily basis.
Greeff Properties Developments Division is now setting up a full show house to show visitors what the end product will look. "We anticipate the show house at Riverside to be open to viewing by the end of this month.