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Retirement Living News

November/December 2016

NEWS STORIES

Can You Go Home Again?  Some Older retirees Say Yes

Some older retirees are finding that Snow Belt states, where their families live, may be more to their liking than the sunny states they first retired to.

Snow Belt states such as New York and Michigan that lose retirees to the Sun Belt states of Florida and North Carolina may be seeing more of them coming back — older and perhaps poorer than when they left.

Even California, which has seen people leave to spend their retirement years in Arizona with its lower cost of living, may be seeing a boomerang effect as elderly people arrive at a more advanced age with less money and more demands on social services.

Nearly 54,000 people age 70 or older left the popular retirement states of Arizona, Florida, North Carolina, South Carolina and Texas between 2012 and 2014 and went to the states that lose the most young retirees — California, Illinois, Michigan, New Jersey and New York.

That’s a 45 percent increase in older seniors moving to those states from the three earlier years, 2009 to 2011, according to a Stateline analysis of census data from the IPUMS project at the University of Minnesota. Moves from Florida to New York nearly doubled to more than 11,000 during that time. Moves from Arizona to California jumped 80 percent to about 9,500.

The shift may not mean that all of the people who made the moves are returning to places they came from. But it suggests to many researchers that many of them are moving because they aren’t as healthy or wealthy as they were just a few short years ago, and now they are seeking help from family.

They also could be homesick for old friends and neighbors, or want to spend their remaining years close to their children and grandkids.

“People might need to rely on help from family more,” said Karen Smith Conway, an economics professor at the University of New Hampshire, who has studied the migration shifts of older Americans.

Why Go Back? A lower cost of living, combined with sunshine, is what makes retirement in Florida, the Carolinas or Arizona enticing to many young retirees from the Snow Belt, who anticipate active lives on the golf course or tennis court. Florida and Texas, for instance, have no state income tax.

The cost of living is well above average in Northeastern states, and below average in traditional retirement states, according to the Missouri Economic Research and Information Center. It’s lower in Texas than it is in Michigan, in North Carolina than it is Illinois, in South Carolina than it is in New Jersey, and in Florida than it is in New York

The gap is even greater when it comes to housing. The cost of housing in California is more than twice the national average. It’s much higher in New Jersey and New York than it is in the retirement states. It’s also higher in Michigan than it is in North Carolina, and in Illinois than it is in Texas.

So why leave a low-cost state for a costlier — and often colder one ?

Jon Rork, an economics professor at Reed College who studies retirement migration, said younger retirees will head south when they are healthier, independent and have more spending power. They may return, he said, when they aren’t as healthy or wealthy, and are more dependent on the state for health care and other services.

New York and New Jersey, for example, offer more generous Medicaid payments to beneficiaries than other states, which can be attractive to low-income seniors who have spent their retirement money. New York also has other programs to help seniors financially, such as a New York City program that freezes rent for low-income seniors living in rent-regulated apartments.

The loss of younger, wealthier retirees, coupled with their return when they are older and need more help, is “a double whammy for Northern states,” Rork said.

Even if older retirees do have money, their declining health may motivate them to move.

Patrick Beagle, a financial adviser in Springfield, Virginia, said he has an 84-year-old client who retired to North Carolina from New Jersey decades ago. But her husband has since died, and as her health begins to fail, she’s considering a move home.

“Financially she’s fine, but the nearest support is hours away,” Beagle said. “She’s planning a move next spring to be near her daughter.”

If so, she would join about 570 older people who moved from North Carolina to New Jersey in recent years.

‘A Social Factor at Work’ The rise in the number of older people moving back to the Snow Belt likely is driven as much by personal and family reasons as anything, some researchers say.

“There’s a social factor at work,” said James Wooster, New Jersey’s chief economist. “They may move to Florida for economic reasons and then find that they really do miss their old friends and their grandchildren.”

Mimi Goodman, in her late 60s, said it’s friendship that makes her and her husband, 70-year-old Jerry, want to move back to New York from their apartment on the west coast of Florida. They’re on a six-week house-hunting trip in the Bronx, where she grew up.

“The decision to move to Florida was a financial one. It seemed like it would be affordable, but we didn’t like it,” she said. “In New York we had really deep connections to friends, the theater and political activism. In Florida, I felt completely cut off. I was surprised at how powerfully that affected me.”

The Goodmans’ children have moved away from the New York area, but many retirees who are making second moves are doing so to be near adult children.

“Persons over 70 relocate to be closer to adult children in a significant share of cases,” said Elwood Carlson, a demographer who specializes in retirement migration at Florida State University.

It’s often easier for grandma or grandpa to make the move to reunite the family than it is for their grown children to join them, Carlson said, especially if the seniors are living in an age-restricted community.

And if personal reasons are driving the rise in moves to the North, then some of the seniors — especially those who want to leave Arizona and Florida — are more able now to afford it.

Housing prices in the Sun Belt, which were especially hard-hit during the collapse of the housing market and even after the recession, have rebounded, making it easier to sell homes and get some money out of them so retirees can pack up and leave.

Bill Ness, who runs a website for people seeking retirement communities, said that as housing prices in Arizona and Florida have picked up, so has people’s interest in returning to where they grew up, raised families or still have family.

More retirement communities have been springing up in New Jersey and Illinois in response to growing demand from people who are moving back from the Sun Belt, he said.

“People are finally able to say, ‘Hey, I can finally sell my house for what I paid for it and move ” Ness said. “At the end of the day, it’s mostly about being closer to family.”

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New Book Offers Advice on Using Reverse Mortgages for Retirement

Much has been written over the last few years about reverse mortgages.  Perhaps none have been more comprehensive than this 150-page book titled “Reverse Mortgages: How to Use Reverse Mortgages to Secure Your Retirement”  It is written by Wade Pfau, one of the leading voices in retirement income planning and professor of retirement income at The American College.

While reverse mortgages – conversions of home equity into tax-free cash payments that homeowners over 62 can use to help fund retirement – are typically portrayed in a negative light. The author shows financial advisors aren’t inherently a bad idea.  Written from an outsider’s perspective, the book demonstrates that when the mortgages are used correctly, they can add an extra layer of security for people who are looking to retire.  Financial advisors are told precisely how reverse mortgages can be used to protect and grow funds so clients saving for retirement can protect their liquid assets. .

The book is the first in the Retirement Researcher Guide Series and aims to provide readers with new strategies for saving for the future.  The book is available for $19.95 from Amazon.

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Social Security Announces 0.3 Percent Benefit Increase for 2017

Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 65 million Americans will increase 0.3 percent in 2017, the Social Security Administration announced last month.

The 0.3 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 60 million Social Security beneficiaries in January 2017. Increased payments to more than 8 million SSI beneficiaries will begin on December 30, 2016. The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.

Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $127,200 from $118,500. Of the estimated 173 million workers who will pay Social Security taxes in 2017, about 12 million will pay more because of the increase in the taxable maximum.

Information about Medicare changes for 2017, when announced, will be available at www.Medicare.gov. For some beneficiaries, their Social Security increase may be partially or completely offset by increases in Medicare premiums.

The Social Security Act provides for how the COLA is calculated. For more information visit www.socialsecurity.gov/cola.

Click here for a fact sheet showing the effect of the various automatic adjustments.

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New Data-Driven Livability Index Identifies Best Large Cities for Seniors

SeniorAdvice.com, based in Austin, TX, has announced the top ten best cities for seniors. The company has developed SeniorScore, the first comprehensive data-driven scoring system specifically designed to identify and measure the livability for seniors for any location in the United States.

The following large cities in the U.S. have been identified by SeniorScore, as the best for seniors, based on an un-biased algorithm:

  1. Oklahoma City, OK
  2. Austin, TX
  3. Pittsburgh, PA
  4. Louisville, KY
  5. Ft. Worth, TX
  6. Richmond, VA
  7. St. Louis, MO
  8. Omaha, NE
  9. Cincinnati, OH
  10. San Antonio, TX

By compiling and scoring over 100 variables, SeniorScore determines how well a specific location accommodates the comfort and needs of senior citizens. It takes into account four different categories: health and safety, recreation and leisure, finance, and general quality of life. In addition to an overall score, SeniorScore also identifies a specific score for each of these categories in order to cater to user preferences.

SeniorScore will help seniors, who are searching for assisted living or new housing, find an adequate location based on multiple factors. It will also help users understand how their current home compares with other locations in terms of livability for older adults.

“This system not only assigns a numeric senior livability grade for cities in America, but for states and zip codes as well,” said SeniorAdvice.com CEO and Founder, Ryan Patterson. “We also have plans to expand the index to rank individual senior living facilities, and it will eventually include international destinations.” The SeniorScore is un-biased and is not influenced by personal opinion or financial interests in any way.

For more information on SeniorScore, visit www.senioradvice.com/seniorscore. To view details regarding the top ten largest cities in America for seniors, visit https://www.senioradvice.com/articles/top-ten-large-cities-in-america-for-seniors.

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