Starting today, I am beginning a weekly column focused on Eastside business and community trends. My column will be based on primary research and what is found behind the numbers.
These research findings represent more than 30 years of experience and thousands of individual research projects conducted on the Eastside. The purpose of this column is to enlighten, and most importantly, inspire thought and further questions that should be asked. The question not asked remains unanswered and becomes a mere assumption.
The retirement economy of 2010 is marked not by a winding down and declination in the quality of life, but with continued vigor, discovery, growth, learning, optimism and the ultimate transference of wealth and wisdom. These characteristics will sustain and enrich future generations with the knowledge gained from past successes and failures. The following three variables foretell the Retirement Economy:
Wealth Provides Retirement
Social Security, union pensions and the accumulation of private wealth provide the basis of wealth through long, successful periods of investment. Based on Hebert Research’s 2010 survey of the classified retirement segment approaching their late 50s and 60s, 20.2 percent of the households will derive their wealth from Social Security. Another 69.9 percent of wealth accumulation will come from private investments, savings and corporate retirement plans.
Expectations of Retirement
Nearly two thirds (62.3 percent) of those planning on retiring at their ideal age have not achieved their goal. Among the retirement age market, the average desired age of retirement was 61.8 years. Many of those expecting to retire will remain in the work force. In fact, reducing unemployment in the past was partially a function of an aging labor force retiring.
Among those who will retire (37.7 percent), nearly half plan to pursue new interests, such as a new career, community volunteering, recreation or travel. Bob Buford, author of “Half Time,” said, “It is all about changing life plans from a focus on success to significance.”
Much of Eastside boards of directors from nonprofits, churches, government commissions and private companies are increasingly comprised of those who want to continue contributing their time, wisdom and financial resources.
Maintaining Life Styles
Maintaining desired lifestyles in retirement is a major motivator, in which the average rating of importance, on a scale of 0 to 10, was 7.5. Furthermore, a similar rating (7.4) was given in terms of confidence that retirees have in their financial planning as they approach the transition phase.
Healthcare will require 36.3 percent of their income followed by 24.4 percent for housing. The remainder, less taxes, would be spent on consumption, investments and giving. So the retirement economy will continue to contribute to the market demand for retail, services, and other forms of recreation comprising the Eastside economy.
One of the final conclusions of the retirement economy is that, as age increases, risk tolerance declines and financial sustainability prevails. Perhaps the emergence of the Retirement Economy will provide the foundation for a more stable financial future.
