Everyone is: Panama, Costa Rica, Thailand, Bali, Spain, Buenos Aires, Hawaii, Australia, even Cuba. And, oh yeah mon, Key West. For the last three to four years, on broker websites around the world, you'll find mention of Baby Boomers. BBs include everyone now between 42 and 60 years old. The expectation is that all 77 million of us will be retiring, starting in a couple of years and continuing for the next 20, flush with savings/pensions. AND that we'll be looking for a retirement and/or second home in [pick your exotic locale].
Each locale thinks it will be The Chosen One, the one where most of us
will be buying that home. Developers have taken this notion to the bank and gone bananas building in
anticipation. Putting the cart before the horse, if you ask me.
A couple of questions come to mind immediately: Where did developers get the idea BBs were going to be so much richer than previous generations? Or that they were going to rush to buy property with their retirement dollars? Have they ever? Who started that rumor and did they have any hard evidence to back it up?
There is no magic in the retirement formula. You aren't earning anymore; you plan ahead. Which is why, historically, retirees settle some place affordable, reasonable. Some place with good
weather, easy access to good, affordable health care, convenient access
to transportation for kids and
grandkids.
Call me naive, out-of-touch, a party pooper... but I can't make sense of this. I AM a baby boomer, right in the middle of the pack. All of my siblings and most of my friends, spread out around the country, are baby boomers. In my circle, almost nobody has the money or inclination to retire to an exotic locale, much less abroad. Unless they can take their grandchildren with them.
My circle all plans to stay put and retire in their homes (if they own them). Or sell out (if they can) and move to an affordable spot near the grandchildren, if they have them, or to good weather, if they're not already there. Most of us don't plan to stop working. We don't want to, for one thing. Social Security certainly isn't going to tide us over and too many pension funds went bust or just don't exist.
One of my best friends from college is the News Director for an O&O (owned and operated) network station in a HUGE N.E. market. She's worked for this network since she was 18, started as an intern. Over the last 33 years, she's worked (days, nights, weekends, holidays) her way up to a good salary and what used to be a great retirement package. "Used to be" because, just before the crash in '00, her network took away the pensions and gave them stock options. Those are worth almost nothing today. On top of that, they'd love to get rid of her because they can hire a newbie to do her job for substantially less... How good do you have to be to sensationalize the news? She's walking on eggshells.
On the flip side, a good friend's husband has a $5,000/month government pension, full medical. They have a comfortable house in the suburbs outside New Orleans and a timeshare. Late to parenthood, they have two kids 8 and 10, so college to consider (they've planned for that). Of the BBs in my circle, she's the only one in a position to afford an exotic locale. And she's not interested. In the least.
Perhaps there are thousands of government employees retiring soon with healthy
pensions and full medical? That could be... 65% of the workforce in Key
West works for the local government. Scary. In fact, I have a friend who
worked for the city for 10 years, then retired to 10 acres in central
Florida. When it was still affordable.
Am I somehow stuck in a time warp and only know regular everyday baby boomers? Is there a world of well-to-do baby boomers to which I am blind? I know plenty of boomers who've worked a job for X years and will retire affordably, comfortably on X dollars. Just like I know plenty of boomers who are losing their shirts because they tried to get-rich-quick speculating in the Building for Boomers craze. There's irony for you.
I don't know any boomers who are going to be so well-off, they'll be buying $500,000 second homes in [pick your locale]. Not even my 50 year old lawyer brother in KY who has done very well for himself. [Actually, my other brother, my sister and I all plan to move in with him as soon as his baby boys are grown and gone. Don't tell him. It's a surprise.]
So, in coming years, will boomers move to where their money goes further? Or will they be buying $500K condos on the beach in Jaco, Costa Rica?
My money's on affordable. Here's where I get those crazy ideas:
Will their social security expire before they do?
How secure are their finances?
Allstate 6/2006
U.S. Retirement System and BB Gen 11/2003
Money 6/2006
Standford University 02/1995
FDIC Weighs In 04/2006
WANTED: A Few Good Baby Boomers - MSNBC 08/2006
Transforming Retirement - Merrill Lynch 02/2005
Nat'l Center For Policy Analysis... Official Report 03/2006
Unless you can point me to some reading that says BBs are
rockin' and rollin', secure in their futures, I would not advise
counting on one to buy your property. There just aren't enough of them
with that kinda cash to go around.
