Americans Delay Retirement

This is the title of a very interesting article recently published in the WSJ - thanks Rick for telling me about it.
I wasn’t that impressed with the article’s tag lines

As Housing, Stocks Swoon - Nest Eggs Shrink, Deferring Dreams; 'Freaked Out' Elite.

More appropriate for the US equivalent of a “red top” than its main financial paper.

The bottom line of the article is that as property prices fall and stock markets erode their savings, many older Americans are delaying retirement. A recent Schwab survey of its financial advisers found that nearly a quarter of clients were considering working longer, specifically because of the economic fallout of the past 12 months.

Like the UK, the concept of a company pension scheme is quickly becoming the exception than the rule. Over the past three decades, the 401(k) plan (The UK’s equivalent of “Money Purchase” scheme) has gradually replaced pension plans as the main source of retirement coverage for U.S. workers in the private sector. In 1979, 62% of U.S. employees participated only in a pension plan. By 2005, 63% of workers only participated in a 401(k) plan. The trouble with these schemes is that they are exposed to the fluctuations in the world’s equity markets. Not a nice thought.

I have yet to think through the implications of a widespread delay of people leaving the workforce. Needless to say its impact will be significant.

I am note sure if you can still read the article (The WSJ is a subscription paper) – here is the link. Dick Stroud

Retire Retirement

Retire Retirement is a book by Tamara Erickson and published by the Harvard Business Press.A review appears in today’s FT.

I have not read the book so I cannot comment if it is fair and accurate. The reviewer’s main gripe is the sweeping generalisation that are made about Boomers and how they differ from other generations.

Generation Y has been particularly influenced by the rise of global terrorism, for instance. So, says Erickson, they live for the moment. Both Generation X and Y are keener on their network of friends than pursuing success at work. But by Erickson's own admission this is a simplistic way to look at individuals: "Of course, any broad characterisation of a group omits much of the important detail that makes us unique."

This rings bells with me and is typical of much that is written about the 50-plus market. However, I do have some sympathy with the writer who is forced into these crude stereotypes.

Most marketers and certainly all journalists want simple answers to complex problems. When you start to explain the shades of grey that exist you can sense the attention evaporate. It is the PowerPoint test. If you cannot answer the question in five bullet points on a slide then you have got the wrong answer or maybe the wrong question. Dick Stroud

12 people who are changing US retirement

You need to read this WSJ article in the next seven days, after then it goes on to subscription only.

Here are a couple of more links that may or may not be available after seven days. The main Web page about retirement and a podcast about the subject.

So who are these pioneers who are shaping the way Americans will live, work and play later in life? Well one of them is Joseph Coughlin who describes his work as "trying to get people to 'age cool.' ”He is the director of AgeLab, based at the Massachusetts Institute of Technology. A smart guy.

The others I recognised are Eric Dishman (Intel), Michael Merzenich (Posit Science), William Thomas (Eden Project) and a John Rother (AARP).

The others, in case you are interested are William Bengen, John Erickson, Charles Feeney, Katherine Freund, Sheryl Garrett, Bernard Osher and John Stewart.

Perhaps my American friends recognise these names? I have to say I am a bit peeved not to be listed (joke) - I am sure it is bias against Brits. Dick Stroud

The Tripadvisor of retirement communities?

This is the first time I have bumped into TopRetirements.com.

Here is how the site describes itself.

Topretirements.com is where real people share honest opinions about the best places to retire. This Web 2.0 site was launched in late 2006 with the goal of helping the 78 million baby boomers now starting to turn 60 make more informed decisions about where they should live in retirement.

Our guiding lights are - you have to live somewhere, retirement gives you the freedom to start over fresh, so you might as well make an informed decision!

I think it going a bit over the top with the Web 2.0 stuff but the basic idea of a Tripadvisor site for places to retire might just work. The site’s discussion forums aren’t that well used, but that's never a shock.

There is a free download of a location selection guide. Whilst it doesn’t reveal any earth shattering issues it still asks some worthwhile questions that I bet most people don’t consider before moving.

I am doing a lot of work in the retirement property business and I know what a massive decision moving house is for people (certainly in the UK). A web site that can provide information and insights might just work since there is a huge amount of money associated with relocation. Dick Stroud

Retirement housing – a few interesting ideas

The concept of ‘cohousing’ is one I haven’t heard before. Well there is an association for ‘it’ in the US.

Cohousing (according to the Web site) is a type of collaborative housing where residents actively participate in the design and operation of their own neighbourhoods. The developments are usually attached or single-family homes along one or more pedestrian streets or clustered around a courtyard. They range in size from 7 to 67 residences, the majority of them housing 20 to 40 households.

There is a sub-group of cohousing for older people. In Europe there are examples of groups of likeminded people coming together to have their own properties and supporting facilities created. This has always sounded a nice idea in theory but I have always wondered how it works out in practice. What it does indicate is the demand for a more personalised version of retirement housing that will be required in the coming years.

The conference of Australia’s Retirement Village Association produced some interesting research.

Here are few of the factlets (well more like observations) that emerged during the presentations:

The largest sector of over-55s will stay in their own homes with rapid growth in home renovations and modifications to suit age limitations.

90% of people aged over 60 also will stay in their own country (Australia)

Of the rest they will move to country or seaside areas and currently only 5% into retirement lifestyle villages and then after age 75.

Over half of the over-55 age group will still work in some capacity with 60 per cent still servicing a mortgage or other debt and even more without enough superannuation to retire.

Many retirees will remain in the big family home to accommodate adult children returning to live with them while they return to study or recover from broken relationships.

Independent and assisted living units are viable inside malls with lift access and the security of a protected mall that includes food outlets and medical centres. This is a worldwide trend for over-70s to meet at malls and use the temperate interiors as an exercise and socialising arena. Good grief I cannot think of anything I would less want to do!

What a hotch potch of contrary indicators. I guess it illustrates the diversity of the 50-plus age group. Dick Stroud

Best places to retire

Following the previous item about the most age-friendly cities. This is what the 50-plus is being told are the best places to retire US News and International Living.

I have my doubts about this and the previous type of analysis. I suspect the ‘winners’ are those who make the most noise in promoting their age-friendly credentials rather than necessarily delivering on the promise. However, from a marketer’s perspective this is what this audience is being told. Dick Stroud

Over-50s show goes to Spain

‘The Over 50s Show’ (described by the organisers, Dublin-based S&L Promotions) as a lifestyle event for older people, is taking place in the Costa de Sol in mid November. It seems that a similar event does well in Ireland and the company is having a punt (unintentional pun) to see how it goes in Spain - the second home of the UK's retired 50-plus. These types of shows are on the increase. They must be fulfilling a market need. Beats the hell out of me what that is. Dick Stroud

Ageing in place is set to be big business

This is a good definition of aging-in-place: “Living in one’s home safely, independently and comfortably, regardless of age, income or ability level”.

About 80% of all Americans (55 years or older) own their own homes. As this age group gets older a lot (estimated to be 80%+) want to stay-put and “age in place”. If this is true then there will be significant business in providing the services to enable this to happen.

To add some credibility to offering services in this area you can now become a Certified Aging-in-Place Specialist (CAPS). This new qualification results from work done by the Remodelors Council -- in conjunction with the NAHB Research Center, 50+ Housing Council and AARP.

If you want to see what this looks like from the consumer’s perspective you can download a brochure. Dick Stroud

Good videos boring web site

The press release reads: “Financial professionals, journalists and consumers can now access the most comprehensive source of information regarding solutions to the Baby Boomer retirement crisis”.

This ‘most comprehensive’ Web site is hosted by the Million Dollar Round Table (MDRT) - The Premier Association of Financial Professionals (so it says)

Well guys I cannot agree with your claims but you do have some really good stuff on the web site, especially the videos of the conference sessions. I wish all organizations would publish their conference proceedings in this way.

Surely you could have come up with a more enticing and professional looking web site. Dick Stroud

American Time Use Survey

This chart is from the US
Department of Labor. So I guess it must be right.

What the hell you do with the information I have no idea. Dick Stroud

AXA Equitable Retirement Scope

This is a document for the library. AXA has been conducting a worldwide study of attitudes to retirement for the past 3 years.

This 120 page report shows the results for the United States, with international comparisons. Lots of good stuff. Dick Stroud