Not my normal sort of blog. Actually, the kind you would kind on Sequioa Seniors. (This blog no longer exists…) But, I’m writing about it because it involves economics and regulations. And, it’s the future that we did not want to see- for anyone.
Since 1 January 2011, there’s been a big change in America. It’s changed the unemployment rates, the employment situation, and our economic future. Because my generation- the Baby Boomers- began retiring on that date. To the tune of some 10,000 each every day. And, will continue to do so for 17 more years (2030). So, the Social Security generation will reach about 20% of the total- from 13% today. (Another reason we need to solve our immigration problem, I might add.)
And, given the way the economy (and the tax structure) has been devastating the middle class, it should not surprise you that these Baby Boomers are going to be in a heap of trouble. Thanks to changes made under Reagan administration, pensions that would afford safe retirement no longer abide. The housing debacle removed the wealth most had retained in their houses, removing 50+% of their wealth. So, that while 1 in 6 retired folks are currently defined as poor, that number will increase dramatically- given that 50% of those retiring have less than $ 10,000 in the bank.
So, where will they go? Nursing homes? Independent living? Aging in place won’t work, since most still owe on their houses and their retirement won’t cover the mortgage with money left over for food and utilities. So, when these folks can’t stay in their homes- and get just a little sick- America will be shelling out $ 50+K to house them in nursing homes- which, given the fact that 20% will be retired and at least 2% (current levels) but probably 5% will need such provisions, we’re talking $ 200 billion a year (in current dollars).
Moreover, there will be significant homeless problems, as the retirees realize they can’t afford rents or homes. So, that may mean we will need to increase our Section 8 housing. But, that takes years- not months. And, I don’t see anyone doing that right now. Moreover, there won’t be any recreational outlets or places to garden there. And, we know that one of the best ways to keep folks mentally agile (not to mention physically fit) is to offer sources of activity like exercise (walking) and gardening. (Portland State University has been studying this for years.)
Of course, we could decide to change the rules that obtain for manufactured homes (you know, trailers); make them real estate, with real rights and requirements. Right now, the land upon which they sit can be sold from under them (moving such homes can cost $ 25K) or the land rents can double- without recourse. (There are ways to convert these land sites into co-ops…check out ROC USA [resident owned communities] for a great explanation.)
I admit- this is not exactly the existence I had planned for myself. But, truthfully, these manufactured homes let folks garden, the parks in which they reside can be considered “gated communities”, and with some foresight, we can locate health centers in the area for satisfy the demands of the communities. So, with the changes in how the rental of the land works, these communities would afford healthcare, recreation, and other required services.
Whatever you think we need to do… time is a-wasting. The bill will be coming due real soon!
AND we are going to have to do it on a wal-mart (aka service industry) salary, because in the Boomer generation we were an industrial economy and now we are a service/investment based economy. The gap in earned wages from the boomers to the x generation is amazingly different. If I think about it too much it nearly gives me a panic attack. Seriously. That said, I have my own idea and plan on how to make things better. I am starting now, it is going to take time, but as you just read today from me…I am committed. (or should be… 😉 )
As long as you are committed to a plan, and not committed, Lisa…
Oh, Roy, say it isn’t so!!! If we are going to be living in mobile homes, where will that leave our children in a few years? Living in caves?
No, they will still be working, Amy, so they will have enough money to pay rents and, perhaps, mortgages. You and I, with our deflated 401(k)- what used to be pensions- living off social security- we will be the poor of tomorrow. (Notice how many ‘retired’ folks are still working?)