As I begin my flight back to Norfolk after attending the trustees meeting of my alma mater, I am reminded that ignoring or not recognizing trends may result in you not being around when they become a reality. Change is hard, but ignoring
it doesn’t make it go away. In fact, it only makes the inevitable worse. Specific to my situation was a discussion about how demographic change is causing universities to plan for a decline in enrollment over the next 10 years, and my alma mater is not alone in this. Documented declines in enrollment nationwide present a challenge to all universities. How will these institutions respond to the reality of 300,000 fewer college students in their classrooms in 2020 and far fewer ten years from now?
And if declining enrollment doesn’t give one concern, there is another major crisis on the horizon at the other end of the generational spectrum. According to The Wall Street Journal, Baby Boomers are getting ready to sell one-quarter of America’s homes over the next two decades. Why is that so bad? The problem according to The Journal is many of these properties are in places younger people no longer want to live (and very likely can’t afford).
Annually I travel to Sun City in South Carolina or The Villages in Florida to visit and provide financial planning services to clients who have moved to these wonderful retirement communities where they enjoy amenities such as golf, shuffleboard, stained glass making classes, on-premise dining and more. They are surrounded by neighbors who enjoy the same things and relish the same laid-back lifestyle after a lifetime of hard work. But the same demographic that propelled the rise of these retirement communities now pose a challenge to the folks who live there.
So how will this trend play out? It is still unsure for current homeowners, but large builders are taking notes and are beginning to make adjustments in their strategy and bottom lines. Homes that will be built in the future will have amenities that appeal to a younger generation of future home buyers. They may also be built in places that are closer to city centers where dining, shopping and culture are in close proximity, rather than around areas with golf courses, age restrictions and general peace and quiet that are “all inclusive.”
If you are looking to retire in a community like the ones I mentioned above, take the time to look out into the future and consider how marketable your home would be if you needed to move out for any reason. While homes in retirement communities are meant to allow you to “age in place” there are still vast numbers of boomers leaving their retirement dream home to move in with family or into assisted living facilities when their physical needs become greater than they can manage themselves.
Being in a community of folks with similar hobbies and interest can be rewarding. But there are also advantages in remaining in a blended community. The next generation of home buyers is likely not interested in separating themselves in a gated neighborhood of other retirees. They prefer blended, diverse communities with smaller, more affordable homes. It’s possible for playgrounds and schools to exist near bocce courts and community centers. It may be a challenge as both demographics evolve, but before you put down the payment on that long-awaited retirement home, have a robust discussion with your family and your financial advisor on your options before signing on the dotted line. It will be well worth the time and effort.
If you’re retiring soon and want to talk to a professional about your financial planning services options surrounding the equity in your home, investment properties or other assets, please give us a call at 757-436-1122. We have financial advisors on staff who specialize in senior wealth management and retirement funding who will be happy to talk through all of your options with you so that you can make the most of your future.