Retirement Living News

May 2012

HEADLINES

• Study Finds That Contrary to Predictions, Boomers Are Retiring
• Study Asks What Boomers Want in Retirement Living
• Many Boomers Seek Niche Retirement Communities
• Job Insecurity and Debt Impacting Ability to Have a Comfortable Retirement
• Genworth Survey Finds Nursing Home Costs Up Four Percent, Home Care Costs Flat
• New Technologies Expected to Help Seniors Stay in Their Homes

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NEWS STORIES

Study Finds That Contrary to Predictions, Boomers Are Retiring.

Despite the popular belief that Baby Boomers will continue to work well past the traditional retirement age of 65, those born in 1946 are retiring in droves, according to  a new study by Met Life’s Mature Market Institute.  Titled  Transitioning into Retirement: The MetLife Study of Baby Boomers at 65, the study is a follow-up to the 2008 study,  Boomer Bookends: Insights into the Oldest and Youngest Boomers  (released in 2009), which looked at the same segment of Boomers at age 62 and includes 450 of the same interview subjects from the original study.

The study reports that 59% of the first Boomers to turn 65 are at least partially retired — 45% are completely retired and 14% are retired, but working part-time. Of those still working, 37% say they’ll retire in the next year and on average plan to do so by the time they’re 68.  Half (51%) of those who are retired say they retired earlier than they had expected.  Of those who retired early, four-in-ten say they did so for health reasons. The majority (85%) of respondents consider themselves healthy, and almost all (96%) retirees say they like retirement at least somewhat. Seven-in-ten (70%) like it a lot.

Almost two-thirds, 63% of respondents, are already collecting Social Security benefits, and on average began doing so at the age of 63, defying the conventional wisdom that people would choose to wait to receive benefits until a later age in order to receive a higher payout. Among those in the survey, just over 60% are confident that the Social Security system will be able to provide adequate benefits for their lifetime.

Regarding the attitude of these respondents, the data shows that 43% of those polled are optimistic about the future. Of the 19% who are pessimistic about what’s ahead, 49% fault the government and 21% blame the economy. The 65-year-old Boomers do not consider themselves old; on average they won’t consider themselves to be old until they’re age 79, a year older than reported in 2007.

“Many of the Boomers weathered the recession well and have been able to stop working. Half of all Boomers feel confident that they are on track or have already hit their retirement goals,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “We found that more are homeowners today than 2008, that the value of their homes decreased by only about 5.2% on average, that the majority feel they’re in good health and that 83% have grandchildren. Overall, it’s a pretty confident group of Americans.”

Additional findings:

• The average retirement age for the 1946 Boomers is 59.7 for men and 57.2 for women.
• 24% have a living parent.
• 84% are parents; 83% are grandparents, up from 77% in 2008.
• Of those not retired, 61% plan to retire at the same age as they planned one year ago.
• 31% of 65-year-old Boomers think they were at their sharpest mentally in their 40s; only 20% say they’re at their sharpest today.
• Home ownership increased significantly among the studied cohort since 2008, from 85% to 93%.
• 71% are married or in a domestic partnership; 12% are divorced or separated; 10% are widowed and 7% are single.

To download the new 26-page report, click here

To download the 2009 study, click here.

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Study Asks What Boomers Want in Retirement Living

Luxury villas, detached homes, one- and two-bedroom apartments built for the golden years — and sitting empty.  Is the independent living model — a standard feature at the traditional retirement community — an endangered species? It could be, unless serious changes are made to accommodate the Boomer generations, according to a recent study by Varsity, a marketing communications and research firm in Harrisburg, Pa.  It provides some surprising insights into the mind-set of Boomers as they consider retirement living options.  It also looks at their attitudes toward current community attributes and what they’ll be looking for in the future in terms of services, housing and design — should they choose to relocate at all.

The study titled The Next Generation: Understanding What the Boomer Consumer Wants from Retirement Living, is based on focus group findings and tours of prominent retirement communities involving adults in their 60s and 70s

Demand for traditional continuing care retirement communities (CCRCs) is poised for growth in the coming decades as the population ages and experiences declining health. A glut of high-end independent living products built during the housing boom, decreasing real estate values, and the increasing availability of home care and “aging-in-place” have created serious census issues for many traditional communities, which are finding it increasingly difficult to sell through to the Boomer generations. These potential residents are working longer, increasingly seeking younger-feeling, more active options, or are remaining in their homes until physically unable to manage.

Some of the study’s top-level findings:

• Many living spaces are deemed too small, to opulent, and do not provide sufficient storage
• Technology will play a major role, as two-computer households are now commonplace
• Transportation should be on-demand
• Dining should not be a formal event, and must include healthy options
• “Green” labels are met with skepticism
• Payment options are too limited, and should include traditional mortgage or rent structures
• Healthcare must be available, and should include memory support

“Boomers have redefined a number of consumer areas,” says John Bassounas, director of client services for Varsity. “Aging and the concept of retirement itself are no exceptions. Clearly, they’re not going to accept the same community where mom and dad or grandma lived, nor will they be content to sit poolside or play shuffleboard. This research showed that, while assisted living and skilled nursing will always be necessary, many communities, architects, planners and directors will have to rethink the whole idea of independent living. Understanding Boomer consumers’ mind-sets, lifestyles and life stages are the best ways to plan for their impact on those products and services.”

To order a free copy of this white paper, go to http://varsitybranding.com/index.php/next-generation/

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Many Boomers Seek Niche Retirement Communities

Retirement communities are no longer one-size-fits-all, and a lot of niche communities are springing up to provide choices for the millions of seniors entering retirement age, according to a story in U.S. News. The market for niche retirement communities will continue to explode, says Andrew Carle, the founding director of George Mason University’s Senior Housing Administration management program.  “This is just the tip of the iceberg,” he says. “The days where your only choices are assisted living or a nursing home are long gone.”

Specialized retirement communities fit retirees’ needs for a variety of hobbies and cultures. The most popular are university-based retirement communities, which Carle refers to as UBRCs, which offer retirees the opportunity to attend campus events, like concerts and arts programs, as well as sit in on classes. Kendal, a retirement community near Oberlin College in Ohio, capitalizes on its relationship with the school by having string quartets perform at its facility. About 37 percent of Kendal residents are alumni or former faculty and staff of the school, according to the community’s website.

Other niche retirement communities offer a more unique experience. The national average rent for an assisted living community in 2011 was $3,477 monthly, according to a Metlife Mature Market Institute survey.  Carle identifies seven that break the mold without breaking the bank, and says they’re equivalent in price to regular retirement communities.

U.S. News goes on to list communities geared toward artists, astronomers, aviators, health enthusiasts, hippies, equestrians, and even former mail carriers, mostly located in warmer-climate states like California and Florida. To read the full story click here

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Job Insecurity and Debt Impacting Ability to Have a Comfortable Retirement

Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels in the face of more immediate financial concerns about job uncertainty and debt.  These and other findings are the result of the Employee Benefit Research Institute’s (EBRI) 22^nd annual retirement confidence survey (RCS).  Just 14 percent are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13 percent measured in 2011 and 2009).

Asked to name the most pressing financial issue facing Americans today, both workers and retirees were most likely to identify job uncertainty.  “Americans’ retirement confidence has plateaued at the lowest levels we’ve seen in the two decades of conducting this survey,” said Jack VanDerhei, EBRI research director and co-author of the report.

Many workers report they have virtually no savings or investments, and workers’ expected age of retirement continues to rise, according to the survey.  However, one area in which Americans are saving for retirement is an employer-sponsored retirement savings plan, such as a 401(k).  In fact, 81 percent of eligible workers (38 percent of all workers) say they contribute to such a plan with their current employer.

While many workers think they’ll be able to work longer in their careers, Mathew Greenwald of Greenwald & Associates, which conducted and co-sponsored the survey, said that some are certain to be disappointed:  “Nearly half of current retirees surveyed by the RCS report they left work earlier than they planned for reasons beyond their control, such as health or economic changes such as job loss.”

Among the other findings in the RCS are:

• Employment insecurity looms large: Forty-two percent identify job uncertainty as the most pressing financial issue facing most Americans today.
• Worker confidence about having enough money to pay for medical expenses and long-term care expenses in retirement remains well below their confidence levels for paying basic expenses.
• Twenty-five percent of workers in the 2012 Retirement Confidence Survey say the age at which they expect to retire has changed in the past year. In 1991, 11 percent of workers said they expected to retire after age 65, and by 2012 that has grown to 37 percent.
• Those already in retirement tend to express higher levels of confidence than current workers about several key financial aspects of retirement.
• Retirees report they are significantly more reliant on Social Security as a major source of their retirement income than current workers expect to be.
• Although 56 percent of workers expect to receive benefits from a defined benefit plan in retirement, only 33 percent report that they and/or their spouse currently have such a benefit with a current or previous employer.
• More than half of workers (56 percent) report they and/or their spouse have not tried to calculate how much money they will need to have saved by the time they retire so that they can live comfortably in retirement.
• Only a minority of workers and retirees feel very comfortable using online technologies to perform various tasks related to financial management. Relatively few use mobile devices such as a smart phone or tablet to manage their finances, and just 10 percent say they are comfortable obtaining advice from financial professionals online.

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Genworth Survey Finds Nursing Home Costs Up Four Percent, Home Care Costs Flat

According to Genworth’s 2012 Cost of Care Survey, the cost to receive care in the home remained unchanged from 2011 to 2012 and home care costs have also risen less dramatically over the past five years than for other types of long term care services.

“Overwhelmingly, Americans prefer to receive long term care in the home and the relatively muted increase in home care costs over the past few years can be viewed as a positive for consumers,” said Steve Zabel, senior vice president of Long Term Care at Genworth. “Consumer demand for home care services has led to a proliferation of home care services providers and more choice for consumers. This competition has kept home care costs relatively stable, especially when compared to the cost of care in a nursing home or assisted living facility.”

Nationally, the median hourly cost for homemaker services and home health aide services is $18 and $19, respectively. While these costs remain flat from the previous year, costs for homemaker services have risen just 1.2 percent annually over the past five years, while home health aide services have risen 1.1 percent a year over the same period of time.

By comparison, the median annual cost for care in an assisted living facility is $39,600 nationally. This represents an increase of 1.2 percent since 2011 and a 5.7 percent annual increase over the past five years. The comparable cost for a private nursing home room rose 4.2 percent from 2011 to 2012 to $81,030, or 4.3 percent annualized over the past five years.

Consumers have more long term care options today than ever before as seen by the increasing number of home care agencies. According to the Centers for Medicaid and Medicare, there were approximately 9,200 Medicare-certified home care agencies in the U.S. at the start of 2008. Today, there are slightly more than 11,000, representing an increase of 20 percent. Conversely, during this same period of time, the number of Medicare-certified nursing homes has increased less than one-half of 1.0 percent from just over 15,000 to 15,100. The number of nursing homes is increasing at a slower rate and is no longer the only option.

While consumers’ options have increased dramatically, creating a tangible plan for long term care is a critical step many overlook. According to Genworth claims data, the youngest claimant ever was 27 years old. Although that is not the norm, it underscores the necessity for a care planning roadmap. Consumers can create a long term care plan and learn more about the cost of care in their local market and nationally by visiting the Genworth website (click here). The site is rich with a range of educational and planning tools to help consumers compare costs across geographies, project future costs and share comparisons and calculations with family, friends or a financial professional.

“Understanding long term care costs in your local market and how these costs tend to change over time is vital to developing a plan to cover expected future costs,” Zabel said. “Genworth’s Cost of Care Survey is the most comprehensive of its kind and provides invaluable information on long term care costs that enable family members to conduct informed discussions with loved ones about future long term needs and preferences in order to be more informed consumers of long term care services.”

Now in its ninth year, Genworth’s Cost of Care Survey provides Americans with both national and local long term care cost data, as well as information on cost inflation over time. Resources include an interactive long term care map (click here) of long term care costs in 437 regions across all 50 states.

To download the full 96-page study, click here.

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New Technologies Expected to Help Seniors Stay in Their Homes

With the majority of seniors indicating they plan to stay in their homes instead of moving into a retirement community, the retirement home of the future will likely be equipped with equipment-based home health care services to help facilitate active senior living.  According to a recent survey by the MetLife Mature Market Institute, 83 percent of individuals reaching retirement age do not plan to leave their current residence.

One company providing aids that enable people to live independently is Active Care. The company’s Personal Assistance Link allows seniors to live actively and independently knowing that medical assistance is available with the push of a button 24 hours each day.  A study by Clarity found that that 65 percent of seniors are interested in using new technologies to stay in their home. The goal is to help people maintain their independence, while giving peace of mind to their loved ones and caregivers that they will be able to get the help they need if a problem arises.

The company’s ActiveHome program  was specifically designed with seniors and those facing chronic illnesses in mind. Sensor systems are installed throughout the home and then closely monitored by a remote CareCenter staffed with specialists who are trained to respond to members’ unique needs.

For example, eating habits are monitored through sensors placed on cabinet doors, the refrigerator and stove. If it looks like someone has not eaten, a CareCenter staffer checks on them to provide assistance. Sensors may also be installed to track whether someone gets out of bed, moves around their home or falls.

Other ActiveCare devices helping to manage health care needs include an electronic pill box that helps ensure the right medications are taken at the right time. Vital signs like blood pressure, blood oxygen, weight and glucose levels are also monitored by the CareCenter daily.

Those using ActiveHome equipment also receive assistance when they leave their house carrying a cell phone-like medical alert device called the Personal Assistance Link (PAL). The device includes advanced fall detection and GPS tracking used to guide emergency personnel or caregivers to a location.

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