Mike Shedlock reports in The Market Oracle :
Millions of baby boomers born into the dawn of the most spectacular economic expansion in history are being forced to re-imagine their retirement futures. Few news outlets have failed to seize upon the low-hanging pun: the boomers have gone bust.
Among the adjustments forced by the new circumstances, perhaps the cruelest twist for many boomers is the need to join younger generations in the roommate queue. The housing crash has forced record numbers of late-middle age homeowners to take in boarders or risk becoming boarders themselves. From California to Vermont, home-share organizations founded to assist the elderly are scrambling to meet the demands of newly bust boomers.
“In the last few months we've experienced explosive growth in interest by homeowners age 50-plus to find rooms and roommates,” says Jacqueline Grossmann, Chicago coordinator for the National Shared Housing Resource Center. “The trend now is getting younger and younger. People in their 50s and 60s are losing their nest eggs and increasingly willing to give up their privacy in exchange for rents of $500, $600 a month.”
Boomers are maximizing room occupancy for the same reason that their kids in their 20s and 30s are still competing for the best group rentals on Craigslist: they're broke.
The extent to which boomer wealth was based on home values is highlighted by a new report from the Center for Economic and Policy Research, entitled "The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble."
The report details how the collapse has left the majority of those around retirement-age almost completely reliant on entitlements. The net worth of median households in the 45 to 54 age bracket has dropped by more than 45 percent since 2004, to just over $80,000. Households headed by those aged 55 to 64, meanwhile, have lost 38 percent of net wealth.
The result is that many baby boomers will only have entitlements to rely on in their retirement.”
Make that entitlements, roommates, and each other.
As more and more boomers scale down their retirement plans and consider alternative living arrangements, it's worth asking: Is shared housing such a bad thing for aging boomers? Does a return to the Communal idea, borne of economic necessity, also have emotional, social, and environmental benefits? Why wait for the retirement home or hospice to live with other people? With the nation full of worthless, ridiculously large, and mostly empty houses, why not fill them with the newly penurious and like-minded boomers in need of housing?
Terry S., a 62-year-old self-employed divorced psychologist in Pittsburgh, is one boomer considering the cooperative housing route. Until the crisis hit last year, Terry planned to spend her retirement between Europe and New York City, living off her IRA and savings. But the crash saw her wealth plummet by 60 percent. “My friends and I feel betrayed because we are now in the same or worse position than those who never saved their money, but may have a pension,” she says. The crisis forced her to rethink retirement, and she now plans to buy a house with her friends. She explains the logic:
Some of my friends and I shared a communal house in the 70s. We first came up with this idea [of doing it again] when we were talking about the possibility of having to live in assisted living or nursing homes, and we decided it would be far better to all live together in a big house with friends we knew and loved and hire a nurse and a cook. One of my friends owns a construction firm and he says he can put an elevator in any home for less than $100,000. We have looked at several homes. One was a beautiful house that backed onto a huge city park and had a pool decks all around and could easily be converted into four private residences. It was $600,000, which would only be $150,000 per unit. Much less than the $4,000 a month to have half of a dingy room in a nursing home that smells like urine.
If the deepening economic crisis does lead the boomers back to Countercultural values, a generation will have come full circle. Whether they end up living in a group house, a shared apartment, or a full-on hippie-style commune, studies show that they will live longer and more fulfilling later lives. “The results here are truly amazing,” says Kirby Dunn, pointing to studies that gauge the effects of shared housing. “Across all programs and age-brackets, people say they feel safer, are less lonely, happier, and sleep better. They also call their family less often for help.”
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