Quote:
Originally Posted by Bob from down south
Thanks for posting those Charles.
The boomer dynamic really needs some serious thought...we're close enough now to the leading edge of the wave of boomer retirements we can't think of this as a future problem anymore. Unless we believe that there's some real difference in the behavior of these up-and-coming seniors from those immediately preceding them, it's a very reasonable and straight-forward proposition seeing some of the challenges coming at us.
Challenges like Social Security, which we have talked about without acting for decades now.
The probabilities of a growing wave of seniors selling and migrating south aren't too hard to foresee...and that wave will likely be exacerbated by the re-emergence of affordable housing in Florida and Arizona after the housing depression smoke clears. So a smart forecaster will look at where the relatively affluent upper-middle aged demographic is housed--the lower income middle-aged probably either won't own homes, or may lack the means to migrate in large numbers. To me, that suggests a lot of higher-end houses in colder climes hitting the market after a market-wide realignment of credit standards that is dramatically reducing the supply of viable customers able to pay high-end prices. The timing in 2011 and beyond appears to tack this market stressor right onto the back side of the pay option ARM implosion which should occur between 2009-2012.
And the hits just keep right on coming.
But not to worry, the NAR says we're bouncing along the bottom for a little while more with a recovery right around the corner.  |
I don't think the retirement years of the baby-boomers may be near as sanguine as many think. First, they have a lot of their supposed retirement savings directly or indirectly (through IRA's, 401K's, pension funds, etc.) invested in lot of the same toxic, rotting meat that has created the current bubble--residential and commercial real-estate investment "vehicles" (they used to be called "schemes," a less complimentary but probably more descriptive adjective), inflated stocks, junk bonds, etc. Second, the old adage of "investing for the long-term" may become a real problem when oldsters are forced to liquidate those securities at depressed prices to meet their living obligations. Finally, of course, the same depression in stocks/real estate will whack tax and social security revenues at the same time the obligations of those funds will be skyrocketing to stratospheric levels. Like the generation that reached senior citizenship in the late 1920's, Baby Boomers may find that the prosperous times were at the beginning and middle of their lives, with big-time hardship making the bookend for the end of their lives. And, for the Gen-X'er's, Millenials, etc. that are following the Boomers--well, there won't be much of anything left.
I don't think the Sun Belt will be any retirement haven, either. Many would strongly argue that much of such sunbelt states as Florida, Arizona, Texas, and California are becoming less livable by the minute right now. Throw drastically higher energy prices--especially for gasoline and electricity--onto that car-dependent, air-conditioning-necessary, sprawled lifestyle, and the Sun Belt will turn into the Swelter and Sweat Belt pretty fast. Houses could be free and people might not want to live there. That, of course, assumes that there will be "retirement" for most people. 20 or 30 years of being able to sit on one's butt in retirement is a relatively recent concept. When Social Security was instituted as an "old age retirement supplement" (not even a full-pension) program in 1936, many people weren't expected to (or did) live long enough to collect it for any more than a very few years, at best. I wouldn't be surprised to see the retirement age for Social Security and most private pensions rising to 80 years old within the next 15-25 years.
Truth is, I foresee a lot of Baby-boomers and subsequent generations living their "golden years" in a place they never expected--with their adult children, wherever that might be. I think the "extended family" all living under one roof will probably, by necessity, make a big comeback in the years ahead. To the extent that we, as a nation and as individuals, continue our over-consumptive, hedonistic, debt-fueled ways, I think the more likely some really tough sledding will be ahead for "retirees" and everyone else.
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02-07-2008, 06:22 PM
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