Retirement Living News

June 2006

HEADLINES  (Click on headline to read story)

• Hurricanes and Rising Property Insurance Rates 
  May Impact Retiree Migration to Florida
• Researchers and Builders Report on Housing Desires of Baby Boomers
• Tax-Friendly States for Car Ownership
• Kiplinger's Annual Retirement Planning Guide Now on Newsstands
• AARP Magazine Reports on Five Best U.S. Cities for Retirement
• Texas Launches 'Certified Retirement Community' Program
  

Archive of Past Issues                          New Retirement Communities

NEWS STORIES

Hurricanes and Rising Property Insurance Rates
Impact Retiree Migration to Florida 

Long considered a retirement haven because of its warm weather, favorable tax laws, low cost of living and laid-back lifestyle, Florida is losing some of its appeal. Experts say retirees across Florida are now feeling the stress of two record hurricane seasons. Many worry that they don't have the physical ability to do repairs after a hurricane, according to the Council on Aging of West Florida Inc., a nonprofit organization that provides services to homebound elderly. They may be healthy otherwise, but they cannot do home repairs. Others fear being victimized by dishonest contractors or having to rely on neighbors. 

About 3.3 million Floridians over age 60, or about 80 percent of the state's senior population, live in hurricane-vulnerable coastal communities, according to population estimates compiled by the state's Department of Elder Affairs. 

Many groups in the state, including Florida's AARP office, want a clearer picture of how the recent hurricanes have affected Florida's appeal as a retirement destination. "It's a question a lot of people are asking, but I don't think anyone has the answer right now," said Dave Bruns, a spokesman for AARP in Florida. Home sales remain strong statewide and retirees continue to show interest in the state.

The Florida legislature's Office of Economic and Demographic Research plans a study this summer to determine whether retirees have left the state or are planning to leave because of hurricanes, said director Amy Baker. "We anticipate that will answer a lot of these questions," she said. 

Meanwhile home insurers are raising premiums or pulling back sharply in renewing policies. State Farm, the largest home insurer (about one million homeowner policies), is seeking to boost premiums in the state by an average of about 70 percent. If approved by state regulators the increase would be effective August 15. 

It is not just Florida that is a target. Places like Long Island and Cape Cod, as well as the coasts in the Southeast, are facing insurance rates that are near double what residents now pay. Insurers are also refusing to sell new policies or renewing old ones. 

Meteorologists say that the country is in the midst of a 20- to 40-year cycle of more and stronger hurricanes. While experts debate whether the increase in hurricane activity is a result of global warming or a shift in warm ocean currents that have historically alternated in the Atlantic Ocean over the last century, they are unanimous in believing that the country is in for a long run of powerful storms.
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Researchers and Builders Report on Housing Desires of Baby Boomers

In a telephone survey of almost 3,400 household in the 45-plus age range, 15.6 percent said they planned to move within the next five years. Of that group, 54 percent will move within the same state, 11.2 percent said they are going to Hawaii, 9.4 percent to Arizona, 5.5 percent to North Carolina, 5.5 percent to Texas, and 5.2 percent to Nevada. And 15.3 percent of those who said they plan on moving indicated that they were likely or very likely to buy a home in an active adult community. However, the 54.4 percent who expect to be moving are unsure if their destination is an active adult community.

The survey was conducted by ProMatura Group of Oxford, Miss., and the results were presented by the company's president, Margaret Wylde, at the "Building for Boomers & Beyond: 50+ Housing Symposium" held in Phoenix in April. Aggregating survey results by Zip code, Wylde found that the demand for active adult housing ranged from a high of 20 percent in the mid-Atlantic states to a low of less than 12 percent in Nebraska, Kansas, Missouri and Illinois. 

In looking at what prospective home buyers in the next four years want, Wylde said that "it's a myth that everybody is downsizing." Roughly half of households currently residing in a home that is 1,600-1,800 square feet indicated that they would be looking for a larger house, and the percentage of those looking for something bigger increased as the size of current homes declined. Among those who now live in a home that is larger than 1,800 square feet, roughly one-third said they would be looking for something bigger. Among those who expect to be buying in an active-adult community, a bigger home is a primary or partial motivation for 22 percent of purchasers, while less space was desirable for 40 percent. 

In new age-restricted Del Webb communities, houses are getting larger, said Ben Redman of Pulte Homes/Del Webb, and a high percentage of the residents do not live there full-time. "A bad housing product is a bad housing product," he added, "but if you're close to what consumers will accept, they also base their decisions on other factors besides the house." 

Bonnie Hicks of Robson Communities reported that the company is retooling its first product series, bumping up homes in the 1,200-1,800-square-foot range to 1,500-2,100 square feet. Several two-story plans are also being added to the mix.

In the mid-Atlantic region, Bill Slenker, president of Slenker Land Corporation, noted that "condominium and multifamily housing has arrived," and the active adult market is becoming "as wide and as fragmented as the traditional housing market." Condos in his communities average 1,500 square feet, but range from 1,400-2,200 square feet. Single-family homes are 2,000-2,400 square feet, and single-family attached homes are 1,500-2,000 square feet or larger. 

To finance the active-adult home that boomers expect to buy in the next five years, Wylde said, 30 percent will purchase the property outright, 40 percent will pay for most of it but take out a small mortgage and 20 percent will mortgage most of it. About 5 percent said they will rent.
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Tax-Friendly States for Car Ownership

For many people who are planning their retirement the taxes and fees associated with owning a new car can be significant. Each state is different and the cost of the car will also make a difference in what you pay in sales tax. Vincentric, an automotive research firm based in Bloomfield, Mich., has put together data from all 50 states on the five-year cost (sales tax, registration and license plate fees) of owning a 2006 Toyota Camry LE 4-door sedan priced at $20,375. 

The least expensive states for owning this car are as follows: (1) New Hampshire* - $211; (2) Oregon - $220; (3) Alaska - $315; (4) South Carolina* - $435; (5) Alabama - $508; (6) Delaware - $595; (7) Virginia - $725; (8) North Carolina - $747; (9) South Dakota - $793; (10) Wyoming - $841. 

The most expensive states are: (42) Illinois - $1,637; (43) District of Columbia - $1,651; (44) Colorado* - $1,790; (45) Utah - $1,889; (46) Minnesota - $1,931; (47) Iowa - $2,043; (48) California - $2,212; (49) Maryland - $2,296; (50) Indiana - $2,504; (51) Nevada - $2,507. 

* The figures do not include local taxes or fees. In Colorado, for example, regions, counties and towns levy their own taxes. New Hampshire, while it appears to be one of the most tax-friendly, is actually one of the least. The five-year cost of owning the Camry is $2,045 because of fees assessed statewide by towns, which add up to several hundred dollars. Similarly, in South Carolina, a personal property tax collected by local jurisdictions, raises the cost of owning the Camry to $1,633. To view a list of all the states, click here. 

Vincentric keeps track of the various state regulations and frequent legislative changes to keep its database up to date. The company's Fees and Taxes Calculator provides you with the ability to estimate the cost of fees and taxes for a new vehicle in all 50 states. The calculator includes all 2006 model year vehicles and any 2007 vehicles for which data is available. 

To read Vincentric's market summary, click here. 
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Kiplinger's Annual Retirement Planning Guide Now on Newsstands

Each year Kiplinger's Personal Finance magazine publishes Retirement Planning -- Your Guide to Securing Your Dreams which focuses on some of the issues that confront those planning their retirement. This year the publication includes a worksheet to help people calculate how much money they will need in retirement. There is also an online version of the worksheet. 

The issue also has stories about mid-life workers who are catching up on their retirement savings, and recent retirees who are reinventing themselves through new careers or starting their own businesses. In addition there are articles about the new Medicare prescription drug program, why tougher Medicaid laws mean you should give long-term care insurance a second look, how retirees can augment their income through annuities, reverse mortgages and even selling their life insurance policies. 

Readers will also find stories about universal design concepts in homes and the latest trends in retirement homes -- from new active adult communities to swapping the suburbs for city living. Retirement Planning -- Your Guide to Securing Your Dreams will be available on newsstands until the end of September.
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AARP Magazine Reports on Five Best U.S. Cities for Retirement

The July-August issue of AARP - The Magazine will have a story titled "Dream Towns" which reports on five cities it has picked as best places to retire. The cities selected are: Las Cruces, N.M.; Charleston, S.C.; Rehoboth Beach, Del.; Memphis, Tenn.; and St. George, Utah. 

The magazine approached the topic by selecting inexpensive states in which to live, then picking interesting cities that also had good transportation and other services. 

Las Cruces was selected because of its great climate (330 sunny days a year), favorable tax laws, and a low cost of housing. Charleston made the list because of its southern charm, rich cultural history and continuing education opportunities.

Rehoboth Beach in Delaware was included for those who seek easy access to coastal living and a beach. The state offers many tax advantages and housing located not too far from the beach or in a bordering town is still reasonable.

Memphis is a cultural mecca and housing is inexpensive. The area has great parks and Elvis Presley's Graceland is located there. 

St. George, Utah, is a fitness-oriented city and is a fine place for enjoying an active retirement. It is in Washington County which is one of the top 10 counties experiencing a high percentage of in-migration. 

The magazine does not annually select a list of best retirement destinations but it is planning to do it on a more frequent basis. The starting point for this year's picks was low taxes and good services. 

Details on 197 retirement destinations selected by the Retirement Living Information Center can be found on the company's Web site under Great Places to Retire . Access requires a one-time membership fee of $19.95.
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Texas Launches 'Certified Retirement Comunity' Program

The Texas Agriculture Department will begin taking applications from cities this month seeking the brand of "certified retirement community" from the state. The effort is part of a new marketing program aimed at attracting retirees to the state. The state's initiative is partially modeled after Mississippi's successful "Hometown Retirement" program, which certifies towns as desirable places to live and then touts them in a coordinated campaign. 

Cities will pay 25 cents per resident to apply, or $5,000 if the city is under 20,000 people. Waco, for instance, would have to pay the state a $29,500 fee and have a winning proposal to be a part of the program. The proposal would have to emphasize such attributes as affordable housing, quality health care, cultural opportunities and low crime. In return, the state will create a "Retire in Texas" Web site, participate in AARP conventions and possibly advertise in publications aimed at seniors. 

Texas ranked sixth on a list of most popular retirement states, according to a new book by Wake Forest University gerontologist Charles F. Longino. Florida, Arizona, Nevada and the Carolinas made the top five. Longino, author of "Retirement Migration in America," said more retirees are flocking to Texas and settling in what they consider smaller, friendlier cities located a short drive from big-city amenities. 

With the baby boomer generation reaching retirement age, communities are competing to attract their tax dollars and consumer spending. Gene Warren, a Phoenix-based consultant who helps communities market to retirees, expects as many as one in five boomers - or 15 million Americans - will relocate upon retirement in the next 25 years. "The stakes are enormous," he said. "Each household will spend an average of $36,000 a year and pay an average of $3,000 in state and local taxes. That's like adding a job-and-a-half to your community."
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